Owl Rock Capital Group and the Dyal Capital Partners division of Neuberger Berman Group entered into a definitive business combination agreement with Altimar Acquisition Corporation to form Blue Owl Capital, an alternative asset management firm with more than $45 billion in assets under management.
Blue Owl will enter the public market through a business combination with Altimar, a special purpose acquisition company sponsored by an affiliate of HPS Investment Partners. The combined entity is expected to have a post-transaction market capitalization of approximately $12.5 billion. As a result of the transaction, Blue Owl is expected to be listed on the NYSE under the new ticker “OWL.”
The new firm’s main business will focus on direct lending and GP capital solutions. The Owl Rock and Dyal businesses will be autonomous but complementary. Each business will maintain their current management and investment teams.
Doug Ostrover, co-founder of Owl Rock, will serve as CEO of Blue Owl.
“Blue Owl’s expertise, agility and scale, supported by a substantial permanent capital base, will enable us to offer a holistic platform of capital solutions to private equity firms and privately held businesses,” Ostrover said. “We believe this will broaden and deepen our relationships and provide us with unrivaled access to compelling investment opportunities. In addition, this permanent capital base will allow Blue Owl to continue to strongly grow its business in a consistent and predictable manner. The foundation of our success is the trust our clients and partners place in us based on our experience, investment approach and commitment to serving them. We look forward to solidifying our position as the capital partner and investment manager of choice for our stakeholders.”
Michael Rees, founder of Dyal, and Marc Lipschultz, co-founder of Owl Rock, will be co-presidents of Blue Owl. Alan Kirshenbaum will be CFO.
“Our businesses will combine robust growth and a strong margin profile with a high level of earnings visibility and stability, offering investors a compelling way to access the alternative asset management industry,” Rees said.
“By building on this strong foundation, we believe we are well positioned to continue to expand our current platforms and pursue new, complementary business lines to provide differentiated sources of returns for our investors,” Lipschultz said.
“This partnership is a clear and natural fit. Neuberger Berman, as a meaningful shareholder, looks forward to seeing Blue Owl continue to grow as an industry leader,” George Walker, chairman and CEO of Neuberger Berman, said. “Moreover, Neuberger Berman has the privilege of continuing to manage $80 billion in alternatives distinct from the Dyal business, and our culture of innovation from which Dyal began will continue to help us deliver for clients in the years to come.”
Upon completion of the transaction, Blue Owl will be a standalone firm and Owl Rock and Dyal founders, alongside Neuberger Berman, will own meaningful equity positions in Blue Owl.
Owl Rock Capital Corporation (ORCC), Owl Rock Capital Corporation II, Owl Rock Capital Corporation III, Owl Rock Technology Finance and Owl Rock Core Income (the Owl Rock BDCs) will continue to be led by Craig Packer, CEO and co-founder of Owl Rock, and will not undertake any change to their investment strategies, teams or processes from this transaction.
Pursuant to the transaction, Altimar, which currently holds $275 million in cash in trust, will combine with Blue Owl at an estimated $12.5 billion pro forma equity value at closing. Assuming no redemptions by Altimar’s existing public stockholders, the existing equity-holders of Owl Rock and Dyal (including Neuberger Berman) will hold approximately 85% of Blue Owl immediately following the closing of the business combination. The founders and senior managers of Blue Owl will retain their equity stakes immediately following the transaction, promoting continued alignment with the combined company’s public investors and clients.
Cash proceeds in connection with the transaction will be funded through a combination of Altimar’s cash in trust and a $1.5 billion fully committed, oversubscribed, common stock private investment in public equity (PIPE) at $10 per share, including commitments from investors such as ICONIQ Capital, CH Investment Partners, Koch Companies Defined Benefit Master Trust, the Federated Hermes Kaufmann Funds and Liberty Mutual Investments.
The board of directors for each of Altimar and Neuberger Berman, as well as the executive committee of Owl Rock, unanimously approved the proposed transaction. Completion of the proposed transaction is subject to approvals of Altimar’s stockholders, the equity-holders of each of the Owl Rock BDCs to the assignment of its advisory agreement and Dyal-sponsored fund’s limited partners, in addition to other customary closing conditions, including a registration statement being declared effective by the Securities and Exchange Commission. The transaction is expected to be completed in the first half of 2021.
Blue Owl’s nine-person board of directors will be initially composed of three independent directors, three Owl Rock-appointed directors, two Dyal-appointed directors and one Neuberger Berman-appointed director.
Perella Weinberg Partners, Goldman Sachs and BofA Securities are serving as financial advisors and Kirkland & Ellis is serving as legal counsel to Owl Rock.
Ardea Partners is serving as financial advisor for Neuberger Berman and Dyal. Skadden, Arps, Slate, Meagher & Flom is serving as legal counsel to Neuberger Berman. Additionally, Citigroup and UBS are serving as advisors to Neuberger Berman. Evercore Group is serving as financial advisor and Fried, Frank, Harris, Shriver & Jacobson is serving as legal counsel to Dyal.
J.P. Morgan Securities is serving as exclusive financial advisor and Paul, Weiss, Rifkind, Wharton & Garrison is serving as legal counsel to Altimar.
Goldman Sachs and J.P. Morgan Securities acted as joint placement agents on the PIPE.
