Owl Rock, Dyal Strike Deal to Combine and Go Public
December 23 2020 - 9:53AM
Dow Jones News
By Cara Lombardo and Miriam Gottfried
Owl Rock Capital Partners LP and Dyal Capital Partners agreed to
merge in a complicated deal that would take them public through a
blank-check company.
The new company, to be named Blue Owl, would combine one of the
biggest owners of private-equity firm stakes with Owl Rock, a
rapidly growing credit investor. It would be valued at about $12.5
billion.
The Wall Street Journal reported earlier this month that the
firms were discussing such a deal.
The firms plan to go public through a merger with Altimar
Acquisition Corp., a special-purpose acquisition company sponsored
by an affiliate of HPS Investment Partners LLC. The deal also
includes additional funds of about $1.5 billion from institutional
investors.
Blue Owl would be led by Owl Rock co-founder Doug Ostrover as
chief executive.
SPAC mergers have exploded in popularity recently as an
alternative to traditional initial public offerings. This deal,
assuming shareholders approve it, would be one of the largest such
transactions. It is the second-largest SPAC transaction announced
in the U.S. this year, eclipsed only by a deal to take mortgage
originator United Wholesale Mortgage public at a valuation of
roughly $16 billion.
The deal is also one of a few instances of two companies merging
with each other and a SPAC simultaneously. Sports-betting operator
DraftKings Inc. merged with a gambling-technology provider as part
of a deal that took it public through a SPAC earlier this year.
Dyal was founded in 2011 by Lehman Brothers veterans Michael
Rees and Sean Ward and is the largest owner of minority stakes in
private-equity firms, credit shops and hedge funds. It already owns
stakes in both Owl Rock and HPS.
For its entire existence, Dyal has been a unit of Neuberger
Berman Group LLC, the big, privately held investment firm.
Neuberger would retain a stake in Blue Owl and hold a board
seat.
Owl Rock was founded in 2016 by Mr. Ostrover, who co-founded GSO
Capital Partners and later sold it to Blackstone Group; former KKR
& Co. partner Marc Lipschultz; and former Goldman Sachs Group
Inc. banker Craig Packer. It has shot up to $23.7 billion in
assets, managed primarily through business-development
companies.
The firm focuses on a fast-growing area known as direct lending,
in which nonbanks make loans to midsize companies, many of them
backed by private equity, and hold them on their books. Such
lenders have been on the rise since the aftermath of the 2008-09
financial crisis, when banks shed many of their riskier
businesses.
Perella Weinberg Partners LP, Goldman Sachs & Co. LLC and
BofA Securities Inc. are financial advisers to Owl Rock. Ardea
Partners LP is financial adviser to Neuberger Berman and Dyal;
Evercore Group LLC is financial adviser to Dyal; and J.P. Morgan
Securities LLC is financial adviser to Altimar. Citigroup and UBS
are also advising Neuberger Berman.
Write to Cara Lombardo at cara.lombardo@wsj.com and Miriam
Gottfried at Miriam.Gottfried@wsj.com
(END) Dow Jones Newswires
December 23, 2020 09:38 ET (14:38 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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