NEW YORK - Blue Owl Capital Inc. (NYSE: OWL), a prominent alternative asset manager, today announced a definitive agreement to acquire IPI Partners, LLC, a digital infrastructure fund manager, for approximately $1 billion. The deal, which includes $10.5 billion in assets under management from IPI, is set to close between the fourth quarter of 2024 and the first quarter of 2025, subject to customary closing conditions.
IPI Partners, established in 2016, has become a significant player in the U.S. data center investment space, with a portfolio of 82 data centers globally. The acquisition is expected to be neutral to Blue Owl's earnings in 2025 and modestly accretive in 2026. The purchase price is composed of roughly 80 percent Blue Owl equity and 20 percent cash.
Upon completion, IPI’s Managing Partner, Matt A'Hearn, will become Head of Blue Owl's digital infrastructure strategy, reporting to Co-President Marc Zahr. The acquisition aims to enhance Blue Owl's digital infrastructure strategy, part of the firm's Real Estate platform. IPI’s employees are set to join Blue Owl and continue managing IPI's existing funds.
An affiliate of ICONIQ Capital, a former IPI owner, will collaborate with Blue Owl to provide services including investment analysis and investor relations, with service payments contingent on future targets and expected between 2026 and 2028.
Blue Owl's Co-CEOs Doug Ostrover and Marc Lipschultz highlighted the strategic fit of IPI's expertise with Blue Owl's net lease strategy, emphasizing the market opportunity in data center financing and the benefits to investors from the combined capabilities of both firms.
The transaction is supported by financial advice from Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, Societe Generale (OTC:SCGLY), and TD Securities (USA) LLC. Legal counsel for Blue Owl is provided by Kirkland & Ellis LLP, while Gibson, Dunn & Crutcher LLP and Berkshire Global Advisors L.P. are advising IPI and Iron Point, respectively.
This news is based on a press release statement. Blue Owl will discuss the acquisition in a conference call today at 8:30 a.m. ET, accessible via telephone or live webcast through the company's website.
In other recent news, Blue Owl Capital reported significant developments. The company delivered robust Q2 results, with fee-related earnings (FRE) of $0.21 per share and distributable earnings (DE) of $0.19 per share. A dividend of $0.18 per share was also declared. During the quarter, Blue Owl Capital acquired Atalaya Capital Management, which increased its assets under management (AUM) to over $220 billion.
In addition to Atalaya, the company added Prima and Kuvare Asset Management to its portfolio, contributing significantly to its AUM. Blue Owl Capital also announced the appointment of John Valtwies as the head of its Australian private wealth business, further strengthening its global presence.
Furthermore, the company made amendments to a key financial agreement to comply with the Trust Indenture Act of 1939. The modifications, involving Blue Owl Finance LLC, an indirect subsidiary, and various other subsidiaries, were intended to ensure the 2021 Base Indenture qualifies under the amended Act. These are recent developments that reflect the company's active management of its financial commitments and strategic growth initiatives.
InvestingPro Insights
Blue Owl Capital's acquisition of IPI Partners aligns well with the company's strong financial performance and growth trajectory. According to InvestingPro data, Blue Owl has demonstrated impressive revenue growth, with a 31.88% increase in quarterly revenue as of Q2 2024. This robust growth supports the company's strategic expansion into the digital infrastructure space.
InvestingPro Tips highlight that Blue Owl has raised its dividend for 3 consecutive years, with a current dividend yield of 3.45%. This consistent dividend growth, coupled with the company's strong financial position—liquid assets exceeding short-term obligations—suggests a solid foundation for the $1 billion acquisition.
The market has responded positively to Blue Owl's performance and strategic moves. The stock has shown a significant 58.89% return over the last year and is trading near its 52-week high. These metrics indicate investor confidence in the company's growth strategy, including this latest acquisition.
It's worth noting that Blue Owl's P/E ratio stands at 110.48, which some might consider high. However, this valuation should be viewed in the context of the company's growth prospects, including the potential benefits from the IPI Partners acquisition.
For investors seeking more comprehensive analysis, InvestingPro offers 15 additional tips for Blue Owl Capital, providing deeper insights into the company's financial health and market position.
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