KKR & Co LP said it would acquire its specialty finance company KKR Financial Holdings LLC (KFN) in a $2.6 billion deal, paid for with KKR shares trading at an all-time high, that will boost the private equity firm's dividends.Launched by KKR in 2004 to invest primarily in a variety of corporate loan and bond instruments, KFN now has a market value of $1.9 billion, a fraction of KKR's $17.7 billion market capitalization.By taking over KFN, however, KKR expects to generate additional earnings by substituting fee revenue it receives for managing KFN on behalf of KFN shareholders with investment income to be generated by what it will now be its own assets.It plans to distribute 100 percent of the investment income it receives from KFN to KKR shareholders. Using a consensus estimate of Wall Street analysts, KKR's total dividend is expected to be 7 percent higher in 2014 as a result.
KKR Financial Holdings LLC is a specialty finance company focused on a range of asset classes. Shares of KFN fell by 0.84% or $-0.08/share to $9.45. In the past year, the shares have traded as low as $8.91 and as high as $11.93. On average, 1067570 shares of KFN exchange hands on a given day and today's volume is recorded at 1684726.
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