On Wednesday, Blue Owl Capital Inc. (NYSE: OWL) stock maintained its Overweight rating with a steady price target of $21.00, as announced by Piper Sandler. The firm expressed positive views on Blue Owl's latest strategic move to purchase Atalaya Capital Management for $450 million.
Blue Owl's acquisition of Atalaya, a company that specializes in alternative credit lending with over $10 billion in assets under management (AUM), marks another step in its expansion strategy following recent acquisitions of Prima Capital Advisors and Kuvare Asset Management.
The acquisition is seen as a significant step for Blue Owl, enhancing its presence in the asset-based finance sector and broadening its overall capabilities. Atalaya's current investor base, consisting mostly of pension funds, sovereign wealth funds, and endowments, presents Blue Owl with the potential to introduce these financial products to the retail market, leveraging its existing retail expertise.
The deal, expected to be finalized in the second half of 2024, is anticipated to have a positive impact on Blue Owl's earnings. Specifically, the transaction is projected to be modestly accretive to the company's distributable earnings per share (EPS) in 2025. This acquisition aligns with Blue Owl's ongoing efforts to diversify and strengthen its financial services and offerings across various sectors.
In other recent news, Blue Owl Capital is set to acquire Atalaya Capital Management for $450 million, a move expected to enhance the company's financial performance starting in 2025. The agreement involves $350 million in Blue Owl equity and $100 million in cash, with an additional potential of up to $350 million in earnout consideration in equity. Blue Owl has also reported its 12th consecutive quarter of increased earnings and has successfully raised $5.2 billion for its Fund VI.
Financial analysts have been actively reviewing the company. TD Cowen downgraded Blue Owl's stock from a "Buy" to a "Hold" rating, citing concerns over earnings potential and dividend projections. However, Piper Sandler, Citi, and Deutsche Bank maintained positive ratings, with price targets ranging from $21.00 to $23.00.
Blue Owl has also been expanding its personnel, appointing Haitham Abdulkarim to lead its institutional business in the Middle East. This is part of the company's expansion strategy in the region. These developments are part of the company's recent activities and strategic moves.
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