GUERNSEY, Channel Islands--(BUSINESS WIRE)--KKR Private Equity Investors, L.P. (Euronext Amsterdam: KPE) and KKR & Co. L.P. (collectively with certain affiliates, “KKR”) today announced that they have entered into a revised purchase and sale agreement to combine the businesses of KPE and KKR whereby KPE would receive interests representing 30% of the outstanding equity in the combined business and the balance of the equity would be owned by KKR’s existing owners and employees.

The amended and restated purchase and sale agreement was unanimously approved by the board of directors of KPE’s general partner, acting upon the unanimous recommendation of the three directors of KPE’s general partner who are independent of both KPE and KKR under the standards of the New York Stock Exchange.

The independent directors of KPE issued the following statement related to the transaction: “In our role as Independent Directors we have unanimously recommended that the KPE Board approve this transaction. Through this transaction, KPE unitholders will gain direct access to all of KKR’s businesses and resources, thereby improving the long-term prospects of their investments.”

Under the agreement, KKR will acquire all of the assets and all of the liabilities of KPE, and, in exchange, KPE will receive equity in the combined business. KPE unitholders’ holdings of KPE units would not change as a result of the business combination. The transaction does not involve the payment of any cash consideration or involve an offering of any newly issued securities to the public; KKR executives are not selling any interests in the transaction. KPE would retain its listing on the Euronext Amsterdam and the KPE units will continue to be subject to existing restrictions on ownership and transfer.

In addition, after a certain period, each of KPE and KKR will have the ability to seek a listing of the combined business in the United States following the completion of the transaction. Additional details regarding the terms and conditions of the transaction are set forth on Annex A to this press release.

While not legally required, KKR and KPE have agreed that the consummation of the transaction be conditioned upon, among other things, the consent of KPE unitholders representing a majority of the KPE units for which a properly completed consent form is properly submitted (excluding KPE units whose consent rights are controlled by KKR or its affiliates). As previously announced, holders of approximately 44% of KPE’s outstanding units have stated that they would consent to a revised transaction on the terms set forth above.

The record date for determining the KPE unitholders entitled to receive notice of, and to consent to, the transaction is the close of business on July 23, 2009. For purposes of determining KPE unitholders as of the record date, only transactions in KPE units that have been settled as of the record date will be taken into account. The solicitation of consents from KPE unitholders is anticipated to commence on July 24 or as soon as practicable thereafter and the commencement will be announced by KPE by press release.

Henry R. Kravis and George R. Roberts, co-founders of KKR, said, “We are thrilled to be taking this next step in KKR’s evolution. Our new unitholders will participate in the financial performance of all of KKR’s businesses and benefit as we grow our asset management efforts around the world. At the same time, we will own an even greater share of our own investments, further aligning our interests with those of our investors. We believe the combined business will be well positioned to take advantage of the dynamic and exciting opportunities in asset management and financial services. We appreciate the support and trust of our new unitholders and the Board and look forward to continuing our partnership.”

KPE expects that its net asset value as of June 30, 2009 on a preliminary basis will be approximately $3.0 billion, or between approximately $14.55 and $14.75 per unit, and will issue its financial report for the six months ended June 30, 2009 on or before August 30, 2009. KKR expects its assets under management as of June 30, 2009 to be approximately $50.8 billion and that its economic net income (ENI) and fee related earnings for the three months ended June 30, 2009 to be between approximately $345 million and $370 million and between approximately $45 million and $55 million, respectively.

If the consent of a majority of the KPE unitholders as described above is obtained and the other conditions precedent to the transaction are satisfied or waived during the third quarter, the transaction is expected to be consummated on October 1, 2009.

Citi is acting as sole financial advisor to KPE. Lazard is acting as financial advisor to the independent directors, and Bredin Prat and Cravath Swaine & Moore LLP are acting as lead legal counsels to KPE and the independent directors.

Goldman Sachs and Morgan Stanley are acting as financial advisors to KKR and Simpson Thacher & Bartlett LLP is acting as lead legal counsel to KKR.

Citi and Lazard have each delivered to the independent directors their respective opinions to the effect that, as of the date of such opinion and based upon and subject to the assumptions made, matters considered and limitations on the scope of review undertaken by each of Citi and Lazard as set forth in their respective opinions, the consideration to be received by KPE in the transaction is fair, from a financial point of view, to KPE. The full texts of each written opinion will be disclosed in the consent solicitation materials provided to holders of KPE common units.

About KPE

KKR Private Equity Investors, L.P. (Euronext Amsterdam: KPE) is a Guernsey limited partnership that seeks to create long-term value by participating predominantly in private equity investments identified by Kohlberg Kravis Roberts & Co. (KKR). As of June 30, 2009, KPE’s investment portfolio was substantially comprised of limited partner interests in six KKR private equity funds, co-investments in 13 companies alongside the private equity funds and three negotiated equity investments. KPE is governed by its general partner’s board of directors, which is required to have a majority of independent directors, and makes its investments as the sole limited partner of another Guernsey limited partnership, KKR PEI Investments, L.P.

The common units and related restricted depositary units of KPE are subject to a number of ownership and transfer restrictions. Information concerning these ownership and transfer restrictions is included on the Investor Relations section of KPE’s website at www.kkrprivateequityinvestors.com.

About KKR

Established in 1976, KKR is a leading global alternative asset manager. KKR's franchise is sponsoring and managing funds that make investments in private equity, fixed income and other assets in North America, Europe, Asia and the Middle East. Throughout its history, KKR has brought a long-term investment approach, focusing on working in partnership with management teams of its portfolio companies and investing for future competitiveness and growth. KKR has more than $37.5 billion in private equity assets under management and more than $13.3 billion in credit assets under management as of June 30, 2009 through various private and publicly traded funds and separately managed accounts. KKR also carries out capital markets activities through its broker dealer subsidiaries. KKR has offices in New York, Menlo Park, San Francisco, Houston, Washington D.C., London, Paris, Hong Kong, Tokyo, Beijing, Mumbai, Dubai and Sydney. More information about KKR is available at: www.kkr.com.

No Offering Statement

This release does not constitute an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration. Any public offering of securities to be made in the United States will be made by means of a prospectus that may be obtained from KPE and that will contain detailed information about KPE and management, as well as financial statements.

Forward Looking Statements

This release contains certain forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. The forward-looking statements are based on KPE’s and KKR’s beliefs, assumptions and expectations of their future performance, taking into account all information currently available to them. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to KPE and KKR or are within their control. If a change occurs, KPE’s and KKR’s business, financial condition, liquidity and results of operations, including net asset value, assets under management, economic net income and fee-related earnings, may vary materially from those expressed in the forward-looking statements. The following factors, among others, could cause actual results to vary from the forward-looking statements: the risk that the transaction may not be completed on the time frame expected by the parties or at all; the possibility that the listing of the interests in the combined business on the New York Stock Exchange or The NASDAQ Stock Market may not occur; the risk that the anticipated benefits of the combined business may not be achieved; the general volatility of the capital markets; changes in KPE’s and KKR’s business strategy; availability, terms and deployment of capital; availability of qualified personnel and expense of recruiting and retaining such personnel; changes in the asset management industry, interest rates or the general economy; underperformance of KKR’s investments and decreased ability to raise funds; increased rates of default and/or decreased recovery rates on KPE’s investments; and the degree and nature of KPE’s and KKR’s competition. Neither KPE nor KKR undertakes any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made except as required by law. In addition, KKR’s and KPE’s business strategy is focused on the long-term and financial results are subject to significant volatility.

ANNEX A FOLLOWS

Annex A

TRANSACTION TERMS AND CONDITIONS