KKR (NYSE:KKR) has entered into a definitive agreement to acquire Arctos Partners, an institutional investor in professional sports franchise stakes. 

The transaction is valued at $1.4 billion plus an additional $550 million in future equity tied to both KKR share price and business-specific performance targets and vesting through 2031, the company wrote in a press release.

Arctos is the "largest" institutional investor in professional sports franchises. The firm manages approximately $15 billion in assets under management.

After the transaction closes, Arctos' managing partners Ian Charles and Doc O'Connor will join KKR as partners, and Arctos' full 76 person team and operations will become part of KKR. KKR will form a new investing business, KKR Solutions, which will be led by Charles.

KKR was advised by Simpson Thacher, as legal counsel, and Kirkland & Ellis as sports counsel. Arctos was advised by Kirkland & Ellis as legal counsel. BofA Securities acted as exclusive financial advisor for Arctos.

Joe Bae and Scott Nuttall, co-chief executive officers of KKR, said, "Arctos has created a distinctive and scaled platform across sports investing and capital solutions for asset managers, and the team has extensive experience in secondaries—three areas where we see significant long-term opportunity."

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