NEW YORK - Blue Owl Capital Inc. (NYSE: OWL), a notable alternative asset manager, disclosed its definitive agreement to acquire Atalaya Capital Management LP, an alternative credit manager, for a sum of $450 million. The acquisition, which is anticipated to close in the latter half of 2024, is projected to enhance Blue Owl's financial performance starting in 2025.
Atalaya, recognized for its focus on asset-based credit investments, manages over $10 billion in assets. The New York-based firm, established in 2006, has a substantial track record, having deployed more than $17 billion of capital. Atalaya's nearly 115 employees, including over 50 investment professionals, are expected to join Blue Owl after the acquisition.
The transaction will involve $350 million in Blue Owl equity and $100 million in cash. Additionally, there is the potential for up to $350 million in earnout consideration in equity, conditional on reaching certain revenue targets.
Blue Owl's Co-CEOs Doug Ostrover and Marc Lipschultz remarked on the acquisition's strategic fit, highlighting Atalaya's pioneering role in private asset-based finance and its robust sourcing and underwriting capabilities.
Ivan Zinn, Atalaya's Founding Partner and Chief Investment Officer, will transition to Blue Owl as Head of Alternative Credit, reporting to Craig Packer, Head of Credit and Co-President of Blue Owl. Zinn expressed enthusiasm for the partnership with Blue Owl, which he believes will support Atalaya's continued growth.
The financial advisors for Blue Owl in this deal include Citigroup, MUFG Bank, Ltd., SMBC, and Wells Fargo, with Kirkland & Ellis LLP serving as legal advisor. Atalaya's advisors are Mizuho, RBC, and Truist, with legal advice from Cravath, Swaine & Moore LLP.
Blue Owl, with over $174 billion in assets under management as of March 31, 2024, is engaged in providing private capital solutions and alternative investment opportunities across various platforms.
This report is based on a press release statement.
In other recent news, Blue Owl Capital has seen a flurry of activity from financial analysts and strategic developments. TD Cowen downgraded the company's stock from a "Buy" to a "Hold" rating, citing concerns over earnings potential and dividend projections. Despite this, Piper Sandler, Citi, and Deutsche Bank maintained positive ratings for the firm, with price targets ranging from $21.00 to $23.00.
Blue Owl Capital also reported its 12th consecutive quarter of increased fee-related and distributable earnings, a testament to its consistent growth. The company successfully raised $5.2 billion for its Fund VI and announced the proposed acquisitions of Kuvare Asset Management and Prima Financial Advisors.
In addition to these financial developments, Blue Owl Capital appointed Haitham Abdulkarim to lead its institutional business in the Middle East, indicating an expansion strategy in the region.
InvestingPro Insights
Blue Owl Capital Inc. (NYSE: OWL) has recently made headlines with its strategic acquisition of Atalaya Capital Management LP. The transaction is expected to bolster Blue Owl's position in the alternative asset management space. As investors consider the implications of this move, a look at the current financial metrics provided by InvestingPro offers valuable insights into the company's market standing and future prospects.
According to InvestingPro, Blue Owl Capital boasts a robust market capitalization of $25.45 billion, underscoring its significant presence in the industry. Despite a high P/E ratio of 118.01, the adjusted P/E ratio for the last twelve months as of Q1 2024 has improved to 85.92. This adjustment suggests a more favorable earnings outlook, which aligns with one of the InvestingPro Tips indicating that net income is expected to grow this year. Furthermore, the company's revenue growth remains strong, with a notable increase of 24.87% in the last twelve months as of Q1 2024.
Investors should also note that Blue Owl's dividend yield stands at an attractive 4.04%, and the company has a history of raising its dividend for three consecutive years, as highlighted by another InvestingPro Tip. This consistent dividend growth, which was 38.46% over the last twelve months as of Q1 2024, may appeal to income-focused investors looking for stable returns.
For those interested in deeper analysis and additional insights, InvestingPro offers a wealth of tips; in fact, there are 9 more InvestingPro Tips available for Blue Owl Capital Inc., which can be accessed at: https://www.investing.com/pro/OWL. To further enhance your investment research, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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