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According to a report in the Financial Times [a paid publication], private equity powerhouse, KKR, is planning to go public.

Although, it will be a convoluted process (then again, private equity folks like such things, right?) That is, KKR will merge into KKR Private Equity Investors (KPE), which is listed on the Euronext Amsterdam (KKR will own about 79% of the entity). And yes, this deal will require shareholder approval from KPE. To this end, KKR will offer a so-called "contingent value right," which means that KPE will get more shares if KKR's stock price does not meet specified milestones (the term is three years).

Next, KKR will then list on the New York Stock Exchange (likely in Q4). The the advisors on the deal include Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS).

However, by using this indirect approach, KKR will not be raising any capital, which is certainly a drawback. After all, Blackstone was able to raise billions as a permanent capital base.

So why go public? KKR has several reasons. First of all, KPR is selling at a steep discount. So, this is an opportunity to get a good deal.

Next, KKR has ambitious goals -- of going beyond buyouts. For example, the firm is expanding into real estate, trading and perhaps even capital raising. And, by being public, KKR will have more latitude in adding on such new businesses. Just look at the Blackstone Group LP (NYSE: BX), which purchased GSO Capital Partners. No doubt, the deal has been a big boost, such as in terms of investing in distressed debt as well as financing buyouts.

Moreover, with the low valuations, there is much upside for future employees, who can get options and stock grants. This can be a great way to snag top talent.

When UK mortgage lender HBOS Plc went to market to raise capital, the outcome was a bust. The company sold only about 8% of the securities. In the end, HBOS's underwriters -- Morgan Stanley (NYSE: MS) and Dresdner Kleinwort Ltd. -- were stuck with $7.6 billion in unwanted paper.

In light of this, it's going to be tough for UK financial institutions to bolster their balance sheets. But there is an alternative: private equity.

In fact, it looks like The Blackstone Group LP (NYSE: BX) is taking a look at Paragon, a UK mortgage lender. It appears that Paragon is opening up its books to engage in some initial due diligence.

Of course, this is still nascent, and deals can easily fall apart, especially in tough markets. However, investors are certainly excited. In London trading, Paragon's shares spiked 23%.

Even so, the value of Paragon is still down 87% over the past year, so it should be no surprise that the private equity folks sense opportunity.

The roots of Reed Elsevier go back to the late 1800s. And since then, it has become a publishing empire. And a big part of the growth has come from M&A.

Well, now the company is engaged in another key deal. That is, Reed Elsevier is engaged in an auction to sell its Reed Business Information (RBI) division.

It's an attractive asset. For example, RBI has such publications like Variety and New Scientist. In all, there are about 80 publications and annual revenues come to about $2 billion.

As a result, a group of private equity firms are lining up to get the deal. These include 3i Group plc, Apax PartnersWorldwideLLP, Bain,TPG, Candover, Cinven, Permira, Advent International and Providence Equity Partners.

Now, RBI's goal is to get $2 billion to $2.5 billion. However, in light of the tough economic situation, this could be optimistic. Keep in mind that RBI may provide some financing help to potential buyers.

Then again, there may be a way to get a stronger valuation: it looks like The McGraw Hill Companies (NYSE: MHP) is interested. All in all, RBI would be a nice fit for the firm, with some revenue and cost synergies.

Foundry Networks, Inc. (NASDAQ: FDRY), which builds networking technologies, went public in 1999. With the Internet surge, the stock price went over $200.

Of course, that was a temporary thing. Since then, Foundry's shareholders have suffered.

However, this week they got some cheery news. Foundry agreed to sell out to Brocade (NASDAQ: BRCD). The deal comes to about $2.91 billion in a combination of cash and stock.

Essentially, the deal blends some key technologies. While Brocade has a strong footprint in fiber channel systems, Foundry is a top player in switches and 10-gigabit Ethernet offerings.

If anything, it's a necessary step to deal with the intensely competitive environment, especially against the mighty Cisco (NASDAQ: CSCO).

No doubt, Brocade has demonstrated success with M&A, such as with its acquisition of McData. However, networking deals can be tricky. After all, Brocade operates primarily on an OEM basis whereas Foundry has a large direct sales force.

There is some financial risk too as Brocade needs to borrow about $1.4 billion.

Rexnord Holdings has been busy with dealmaking over the past few years. For the most part, the company is an amalgam of $1.3 billion in M&A deals.

In 2006, Apollo Management bought Rexnord from The Carlyle Group. Seven months later, Rexnord merged with Zurn. And things aren't over. Now, Rexnord has filed to go public.

Basically, there are two key pieces to the company. First, there is the power transformation division, which manufactures gears, bearings, seals and conveying equipment. Next, Rexnord has a water management division. This involves the handling of professional grade plumbing and water control products.

About 85% of the total sales of Rexnord come from products where it has the leading market share positions.

A key to Rexnord is its strong distribution network. For example, the power transmission business has more than 400 distributor customers and 2,200 branches. As for the water management part, there are 550 independent sales reps.

For the year ended March 31, 2008, Rexnord posted net sales of $1.9 billion and adjusted EBITDA of $382.7 million. Since 2004, the growth rate for sales has been about 27% (when you include acquisitions).

The proposed symbol for Rexnord's IPO is "RXN." What's more, you can locate the prospectus at the SEC website.

According to independent tech research firm 451 Group, SAP (NYSE: SAP) has been trying to sell off its TomorrowNow division since January. Unfortunately, there were no bidders. As a result, SAP has decided to shut down the business.

SAP purchased TomorrowNow in 2005. It looked like a smart deal. After all, the company developed systems to make it easier to use alternatives to Oracle (NASDAQ: ORCL)'s maintenance customers (known as the Safe Passage Program).

So why the dearth of interest for TomorrowNow? Well, Oracle filed a lawsuit against the company in March 2007. The allegation was that TomorrowNow made improper downloads from Oracle's servers.

No doubt, such a thing can be scary for any possible suitor.

The irony is that TomorrowNow customers – which amount to about 225 – will probably have no choice but to return to Oracle.

The Blackstone Group LP's (NYSE: BX) $930 million purchase of GSO Capital Partners early this year didn't get much fanfare. But so far, it looks like a stellar deal.

Simply put, GSO is a hedge fund that's focused on distressed debt. Of course, with the slowing economy, GSO is in a prime spot to capitalize on some nice opportunities.

But there is more. Basically, GSO has become a key source of buyout financing (this is according to Bloomberg.com).

For example, when the Weather Channel was up for sale, it was tough to get financing for the deal. So why not GSO?

It worked. In the end, Blackstone and Bain Capital teamed up with General Electric (NYSE: GE) to pull off the acquisition. As for GSO, it provided higher-risk mezzanine debt financing.

Of course there are issues. After all, Blackstone has a conflict. But at the same time, the financial markets are mired in a credit crunch. So, if there are essentially no alternatives, GSO is probably going to provide the best offer.

More importantly, Blackstone realizes that there are some juicy opportunities right now. Thus, by having the GSO advantage, Blackstone certainly is positioned nicely.

For the phamra industry, the long-term trends look promising, especially in light of the aging population. While companies face lots of pressure to cut costs, this is a good thing for the generic drug industry. And, as should be no surprise, we are seeing some dealmaking.

Today, Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) has agreed to purchase Barr Pharmaceuticals Inc. (NYSE: BRL) for a cool $7.46 billion (rumors have been swarming about this deal since July 16th).

Israeli generic-drug maker Teva is looking for opportunities to bolster its markets. Acquiring Barr would give it a nice platform in Europe (this was actually because of an acquisition of Pliva in 2006). What's more, the company has a nice offering of drugs such in the contraceptives category.

Teva, already the largest generic drug company in the world, has gotten even bigger with this deal. Taken together, the combined entity will have revenues of close to $12 billion.

With its resources, Teva can continue to snap up some pretty big deals. In the case with Barr, the premium was a whopping 42% (as of Wednesday's close).

So far in today's trading, Teva's shares are up 2.2% to $42.

Cleveland-Cliffs Inc (NYSE: CLF), founded 160 years ago, is a global mining operator. It's the biggest producer of iron ore pellets in North America and is a major supplier of metallurgical coal. Over the past year, Cleveland's stock price has gone from $28.20 to a high of $121.95. No doubt, the company has benefited handsomely from the surge in the steel market.

Today, Cleveland has offered to pay $128 per share – a cool $10 billion – for Alpha Natural Resources, Inc. (NYSE: ANR), a high-quality Appalachian coal supplier. The expected pro forma enterprise value of the merged companies, which will be called Cliffs Natural Resources, is expected to be about $22 billion.

The metrics on the deal look enticing. By 2009, Cliffs should have revenues of $10 billion and EBITDA of $4.7 billion. Moreover, by 2010, there are expected to be at least $200 million in annual synergies.

All in all, the deal will increase scale, which is becoming essential as the steel industry consolidates. For example, Cliffs will have reserves of about one billion tons of iron ore and one billion tons of metallurgical and thermal coal.

Wilbur Ross has made billions by finding opportunities in distressed industries such as steel and mortgages.

So, what's his next target? Well, he has invested $80.4 million in SpiceJet Ltd., a discount carrier in India. The investment dollars come from Ross's fund, WL Ross & Co.

As should be no surprise, SpiceJet is losing money as it deals with high oil prices and heavy competition. Plus, in order to continue growing, the company has a voracious need for capital to take on new planes.

For Ross, this deal is definitely small. But, at the same time, it does reveal some of his thinking.

Of course, he sees lots of growth opportunities in emerging markets – and the recent sell-off in equities is making valuations alluring.

What's more, Ross thinks oil prices will eventually fall (he thinks they could drop back to $100 per barrel within a year).

Even so, it's gutsy. But that's what has made Ross huge amounts of money over the years.

In the midst of an ailing US economy in the early 1990s, Cerberus Capital Management, L.P. got its start. And yes, the firm found many undervalued opportunities – and made a bundle. Actually, today Cerberus has holdings with aggregate annual revenues in excess of $100 billion.

So, in the current environment, Cerberus should be doing fine, right? Not necessarily. According to a story in Bloomberg.com, Cerberus's latest fund – called Series Four -- is down 1% since November 2006.

And it makes sense. If anything, Cerberus has been early in a variety investments. It also looks like the firm has diverged somewhat from its core-value approach.

Oh, and of course, Cerberus invested in iffy deals like Chrysler LLC and GMAC LLC.

True, Cerberus does take a disciplined approach to portfolio allocation – with no more than 5% of a fund in a particular deal.

However, such amounts can still be material – especially in a low-return environment. After all, there is still little clarity in the auto and mortgage markets right now.

The credit crunch is not going away, and as a result, there has been a sharp fall-off in leveraged buyouts (LBOs). Basically, only relatively small LBOs -- between $1 billion to $2 billion -- are getting done.

But there is a bright spot: strategic acquisitions. If anything, we are seeing a variety of mega deals in this category. A survey from Dealogic shows that – as of June 25 – there were $597 billion in strategic M&A transactions, only 2% down from last year's total.

Some of the notable deals include: InBev's $49.9 billion play for Anheuser-Busch Cos. (NYSE: BUD), Mars' $23 billion deal for Wm. Wrigley Jr. Co. (NYSE: WWY) and Dow Chemical Co's (NYSE: DOW) $18.8 billion cash purchase of Rohm & Haas Co. (NYSE: ROH). The last two have involved financing from Warren Buffett's Berkshire Hathaway (NYSE: BRK.A).

Why the resilience with strategic deals? Well, there are several key reasons.

First of all, it helps that the equity markets have been in bear mode. No doubt, this makes it easier to get compelling valuations.

Next, there isn't much competition from private equity buyers. Just a few years ago, PE firms essentially crowded out many strategic buyers that couldn't get the kind of financing leverage.

Finally, the drop in the dollar has made U.S. assets pretty cheap. As seen with the Anheuser deal, InBev had little trouble raising its bid from $65 to $70.