Morningstar Analyst On KKR-LifeLock Rumor: 'I Don't Think KKR Would Want To Be Involved With A Business With Regulatory Risk'

When asked about a rumored buyout of Lifelock Inc LOCK by KKR & Co. L.P. KKR, Morningstar Analyst Stephen Ellis told Benzinga that his impression is that it wouldn’t be a very good deal.

Ellis explained that he doesn’t think Lifelock has competitive advantages and that the core offering is “a little questionable” from a consumer-value standpoint. He thinks there’s a lot of regulatory risk that Likelock is struggling to deal with as well.

“It would be a pretty risky deal from KKR’s perspective. I’m not sure there would be a lot of upside given the regulatory risk,” he said.

Ellis’ impression of Lifelock’s regulatory risk is that some of the company’s advertisements have been questionable in terms of over-promising what they do.

“I don’t think KKR would want to be involved with a business with that kind of regulatory risk and that could potentially materially change the business overnight,” he said.

Instead, Ellis mentioned that KKR might do better to focus on more traditional routes like fixing operational issues or acquiring a new management team.

Shares of Lifelock traded roughly 1.80 percent down in Wednesday’s. KKR is also trading lower about 0.45 percent.

Brianna Valleskey contributed to this report.