(Reuters) -Circor International said on Tuesday it has accepted investment firm KKR's revised buyout offer of $1.7 billion, including debt, sending the industrial machinery maker's shares up 6% in premarket trading.

KKR sweetened its offer after Circor received an unsolicited buyout proposal from a third party for $52.65 per share in cash.

Circor board deemed KKR's offer of $51 per share as superior, citing greater funding certainty and a clearer and faster path to receiving antitrust approvals.

KKR, which had earlier proposed to take Circor private for $49 per share, has also agreed to pay shareholders $125 million in case the merger fails.

The deal represents an equity value of nearly $1.04 billion, according to Reuters calculations. It is expected to close in the fourth quarter of this year.

Circor said earlier this month it had entered into a $1.6 billion take-private deal with KKR to expand its presence in the flow-control space.

Flow-control products help manage and control liquids and gases using equipment or services such as pumps, valves, compressors and meters.

(Reporting by Aishwarya Nair in BengaluruEditing by Vinay Dwivedi and Saumyadeb Chakrabarty)