KKR To Buy KKR Financial Holdings For $2.6 Bln.

(RTTNews) - Investment firm KKR & Co. L.P. (KKR) Monday said it agreed to acquire specialty finance company KKR Financial Holdings LLC (KFN) in an all-stock transaction valued at about $2.6 billion.

KFN shareholders will get 0.51 units of KKR stock for each KFN share held, the company said in a statement. This represents a 35% premium to KFN's closing price on Monday. Shares of KFN surged 31 percent in after hours trade following the news.

KFN is a specialty finance company with a $2.9 billion portfolio invested in a complementary set of strategies, which KKR currently manages.

The transaction is subject to approval by KFN's shareholders as well as customary regulatory approvals and other customary closing conditions.

KKR expects to close the acquisition in the first half of 2014, however, it is subject to KFN shareholder approval and certain regulatory and government approvals.

Following the closing of the deal, KFN will become a subsidiary of KKR. KKR expects the acquisition to provide a meaningfully greater recurring component to its distribution and also be immediately accretive on a total distribution per unit basis.

KFN closed Monday's trading at $9.45, down $0.08 or 0.84%, on the NYSE. The stock however, gained $2.95 or 31.22% in the after-hours trade.

KKR closed Monday's trading at $25.08, up $0.10 or 0.40%, on the NYSE. The stock, however, dropped $0.43 or 1.71%, in after-hours trade.