"This agreement is an important step in focusing Sandvik on its core businesses. The divestment creates additional capacity for growth and expansion for the core business of Sandvik," said Sandvik president and chief executive Björn Rosengren in a statement. 

Based in Fair Lawn, N.J., USA, Hyperion makes wear-resistant tooling components from cemented carbide, cubic boron nitride and synthetic diamond. It employs approximately 1,400 people and generated about US$378.6 million in revenue over the last 12 months. 

"Hyperion is known for its high-quality, effective products and has a loyal customer following. We see tremendous opportunity to help support the growth of the company and its customers by establishing the business as a standalone entity," said Pete Stavros, head of KKR's industrials investment team.

The sale concludes a process that began in May 2016, when Sandvik first announced its intention to divest the business. The deal is expected to close sometime in the first half of 2018.