KKR to buy Hitachi's power tools unit for $1.3 bn

US private equity firm KKR & Co today struck a deal to buy Japan's Hitachi Ltd's power tools unit, Hitachi Koki Co Ltd, for about $1.3 billion.

Under the terms of the deal, KKR will launch a tender offer for Hitachi Koki at 870 yen per share, or a total of 88.2 billion yen.

Including a special dividend of 580 yen per share, KKR will pay a total of 147.1 billion yen

The sale would help Hitachi, which owns 51.2-per cent of Hitachi Koki's voting rights, to focus on its core business segments such as infrastructure.

Bloomberg had in October reported that Hitachi, Japan's second-largest manufacturer, was considering a sale of its controlling stake in Hitachi Kokusai Electric Inc, which produces equipment for semiconductor makers and wireless-network gear manufacturers.

Founded in 1948, Hitachi Koki manufactures power tools and life-science instruments.

The Tokyo-based company makes metalworking power tools, woodworking power tools, cordless power tools, construction power tools, pneumatic tools, woodworking machines, outdoor power equipment, gardening tools, household power tools, dust collectors, measure laser tools.

It also makes ultracentrifuge, high-speed refrigerated centrifuge, micro centrifuge, large-scale continuous flow ultracentrifuge under its Life-Science Instruments unit.