Together, Rithm and Sculptor form a strong
partnership offering global investors best in class investment
capabilities across multiple asset classes.
Rithm Capital to host a conference call today
at 8:00 AM ET.
Rithm Capital Corp. (NYSE: RITM; “Rithm”), an asset manager
focused on the real estate and financial services industries, and
Sculptor Capital Management Inc. (NYSE: SCU; “Sculptor”), a global
alternative asset manager with $34 billion in assets under
management (“AUM”)(1), today announced entry into a definitive
agreement under which Rithm will acquire Sculptor in a transaction
valued at approximately $639 million(2), which includes $11.15 per
Class A share of Sculptor.
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the full release here:
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“This transaction is transformational for Rithm,” said Michael
Nierenberg, Chairman, Chief Executive Officer and President of
Rithm Capital. “Sculptor’s $34 billion of AUM coupled with Rithm’s
$7bn of permanent equity capital and $30+ billion balance sheet
creates a world-class asset management business. We are very
excited to bring together two organizations with strong track
records, excellent management teams, and seasoned investment
professionals. Sculptor has a tremendous global investment platform
and we believe the combination of both our businesses will continue
to deliver great long-term value for shareholders and fund
investors alike.”
Sculptor’s investment and leadership teams will continue in
their roles and certain members of Sculptor leadership have agreed
to vote shares held by them, representing an aggregate of
approximately 26% of the outstanding Sculptor voting shares, in
favor of the transaction. Upon completion of the transaction,
Sculptor will operate as a subsidiary of Rithm and will continue to
be led by Jimmy Levin, as CIO and Executive Managing Partner,
reporting to Michael Nierenberg, Chief Executive Officer,
President, and Chairman of Rithm. Sculptor will continue to operate
as is - with an intense focus on delivering risk adjusted returns
on the capital with which it has been entrusted.
Jimmy Levin, Chief Investment Officer and Chief Executive
Officer of Sculptor, stated “We are extremely pleased about the
opportunity to combine with Rithm to capitalize on the growing
opportunity set we see in our business. We are excited to leverage
this combination to continue to execute on our mission of providing
our fund investors with attractive investment returns. We have long
sought a partner with the stable capital structure, culture and
vision to help unlock the potential for our platform to deliver
more and greater value to our fund investors.”
Marcy Engel, Chairperson of Sculptor’s Board of Directors,
stated “We are thrilled to deliver a great outcome for Sculptor
shareholders and an opportunity for Sculptor to continue to build
on its exceptional platform. We look forward to watching the
combined company grow its already strong position as a leader in
the alternative asset management space.”
Strategic Rationale
- Significantly expands Rithm’s capabilities in the
alternative asset management sector:
- $34 billion of AUM(1) diversified across the real estate,
credit and multi-strategy investing spectrum
- Creates instant scale and broadens Rithm’s product offerings
and investment management capabilities
- Combination of complementary platforms creates a compelling
partner for investors:
- Rithm and Sculptor benefit from complementary capabilities,
significantly enhancing the transaction potential and benefit to
shareholders, fund investors and employees
- Adds a long-tenured management and investment team to the Rithm
platform with a strong track record
- Potential to unlock significant opportunities to grow
Sculptor:
- Provides capital to accelerate growth across sectors
- Ability to augment existing Sculptor business by seeding new
funds and strategies and leveraging existing infrastructure to
launch complementary funds
- Attractive transaction for Rithm and Sculptor
shareholders:
- Represents a premium of 18% over the closing price of
Sculptor’s Class A shares on July 21, 2023 and a premium of 31%
over the unaffected November 17, 2022 closing Class A share price
of $8.50(3).
- Expected to be neutral to Rithm’s 2024 earnings and accretive
in 2025
(1)
As of July 1, 2023.
(2)
Total transaction value includes upfront
equity purchase price, assumption of certain unvested securities
and repayment of Sculptor term loan and warrants.
(3)
November 17, 2022 is the day prior to
Sculptor's announcement of the formation of a special committee of
independent directors of the Sculptor Board of Directors (the
"Special Committee") to explore potential transactions.
Key Transaction Details
Rithm will acquire Sculptor in a transaction valued at
approximately $639 million(2). Sculptor Class A shareholders will
receive cash consideration equal to $11.15 per share, with Sculptor
operating partnership unitholders receiving the applicable amount
of cash consideration in accordance with the Sculptor partnership
agreements based on such $11.15 per share price. The parties also
expect that, subject to the satisfaction of certain conditions,
Sculptor operating partnership Class A / Class A-1 unitholders will
be given the opportunity, in lieu of receiving cash consideration,
to roll their Sculptor partnership units into partnership units of
one or more Rithm subsidiaries. The transaction represents a
premium of 18% over the closing price of Sculptor’s Class A shares
on July 21, 2023 and a premium of 31% over the unaffected November
17, 2022 closing Class A share price of $8.50(3).
The transaction is expected to be funded from Rithm’s cash on
hand and available liquidity and is expected to be accretive to
Rithm shareholders in 2025.
The Sculptor Board of Directors, acting on the unanimous
recommendation of the Special Committee, has unanimously approved
the transaction and has recommended that Sculptor shareholders vote
to approve it as well. Rithm’s Board of Directors has also
unanimously approved the transaction. The transaction is subject to
customary closing conditions, including approvals by Sculptor’s
shareholders (including the approval by the holders of a majority
of the outstanding shares of Class A stock not owned by Class A /
A-1 unitholder shareholders or executive managing directors of
Sculptor as of July 23, 2023 or the date of Sculptor’s shareholder
meeting to approve the transaction), certain regulatory approvals,
and the receipt of certain consents. The transaction is expected to
close in the fourth quarter of 2023.
Advisors
Citi acted as the exclusive financial advisor to Rithm and
Skadden, Arps, Slate, Meagher & Flom LLP and Debevoise &
Plimpton LLP served as legal counsel to Rithm. PJT Partners acted
as financial advisor and Latham & Watkins LLP acted as legal
counsel to Sculptor’s Special Committee. J.P. Morgan Securities LLC
acted as financial advisor and Weil, Gotshal & Manges LLP acted
as legal counsel to Sculptor.
Investor Presentation
A supplemental investor presentation on the transaction will be
available on the Investor Relations | Presentations section of
Rithm Capital’s website www.rithmcap.com prior to the conference
call.
Conference Call Information
Rithm Capital’s management will host a conference call on July
24, 2023 at 8:00 A.M. Eastern Time. A copy of this press release
will be posted to the News section of Rithm Capital’s website,
www.rithmcap.com.
All interested parties are welcome to participate on the live
call. The conference call may be accessed by dialing 1-833-974-2382
(from within the U.S.) or 1-412-317-5787 (from outside of the U.S.)
ten minutes prior to the scheduled start of the call; please
reference “Rithm Capital Investor Conference Call.” In addition,
participants are encouraged to pre-register for the conference call
at https://dpregister.com/sreg/10181375/fa0be896f7.
A simultaneous webcast of the conference call will be available
to the public on a listen-only basis in the News | Events section
at www.rithmcap.com. Please allow extra time prior to the call to
visit the website and download any necessary software required to
listen to the internet broadcast.
A telephonic replay of the conference call will also be
available two hours following the call’s completion through 11:59
P.M. Eastern Time on July 31, 2023 by dialing 1-877-344-7529 (from
within the U.S.) or 1-412-317-0088 (from outside of the U.S.);
please reference access code “3587706.”
About Rithm Capital
Rithm Capital is an asset manager focused on the real estate and
financial services industries. Rithm Capital’s investments in
operating entities include leading origination and servicing
platforms held through its wholly-owned subsidiaries, Newrez LLC,
Caliber Home Loans Inc., and Genesis Capital LLC, as well as
investments in affiliated businesses that provide residential and
commercial real estate related services. The Company seeks to
provide attractive risk-adjusted returns across interest rate
environments. Since inception in 2013, Rithm Capital has delivered
approximately $4.7 billion in dividends to shareholders. Rithm
Capital is organized and conducts its operations to qualify as a
real estate investment trust (REIT) for federal income tax purposes
and is headquartered in New York City.
About Sculptor
Sculptor is a leading global alternative asset manager and a
specialist in opportunistic investing. For over 25 years, Sculptor
has pursued consistent outperformance by building an operating
model and culture which balance the ability to act swiftly on
market opportunity with rigorous diligence that minimizes risk.
Sculptor’s model is driven by a global team that is predominantly
home-grown, long tenured and incentivized to put client outcomes
first. With offices in New York, London and Hong Kong, Sculptor
invests across credit, real estate and multi-strategy platforms in
all major geographies. As of July 1, 2023, Sculptor had
approximately $34.2 billion in assets under management.
Cautionary Note Regarding Forward-Looking Statements
Certain information in this press release may constitute
“forward-looking statements” made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
including, without limitation, the acceleration of Rithm and
Sculptor’s growth, the value-additive nature of the transaction for
Rithm shareholders, the addition of an experienced management team
with a strong track record, the ability to successfully integrate
complementary platforms, the ability to create a compelling
partnership for investors, the strengthening of fundraising
capabilities, the ability to successfully establish relationships
with new third-party clients and the broadening of reach and
investment capabilities. All statements, other than statements of
current or historical fact, contained in this press release may be
forward-looking statements. Without limiting the foregoing, the
words “believes,” “anticipates,” “plans,” “expects,” “may,”
“should,” “could,” “estimate,” “intend” (or the negative of these
terms) and other similar expressions are intended to identify
forward-looking statements. These statements represent the
companies’ current expectations regarding future events and are
subject to a number of trends and uncertainties, many of which are
beyond Rithm’s and Sculptor’s control, which could cause actual
results to differ materially from those described in the
forward-looking statements. Accordingly, you should not place undue
reliance on any forward-looking statements contained herein. For a
discussion of some of the risks and important factors that could
affect such forward-looking statements, see the sections entitled
“Cautionary Statements Regarding Forward Looking Statements,” “Risk
Factors” and “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in Rithm’s and Sculptor’s most
recent annual and quarterly reports and other filings filed with
the U.S. Securities and Exchange Commission (the “SEC”), which are
available on both companies’ websites (www.rithmcap.com and
www.sculptor.com).
Factors which could have a material adverse effect on Rithm’s
and Sculptor’s operations and future prospects include, but are not
limited to, the following risks relating to the transaction,
including in respect of the satisfaction of closing conditions to
the transaction on a timely basis or at all, including the ability
to obtain required regulatory approvals and the Required
Stockholder Approval; unanticipated difficulties and/or
expenditures relating to the transaction and any related financing;
uncertainties as to the timing of the transaction; litigation
related to, or other challenges to, the transaction; the impact of
the transaction on each company’s business operations (including
the threatened or actual loss of employees, clients or suppliers);
the inability to obtain, or delays in obtaining cost savings and
synergies from the transaction; incurrence of unexpected costs and
expenses in connection with the transaction; risks related to
changes in the financial, equity and debt markets; and risks
related to political, economic and market conditions. In addition,
the risks to which Sculptor’s business is subject, including those
risks described in Sculptor’s periodic reports filed with the SEC,
could adversely affect the transaction and, following the
completion of the transaction, Rithm’s operations and future
prospects.
New risks and uncertainties emerge from time to time, and it is
not possible for Rithm and Sculptor to predict or assess the impact
of every factor that may cause its actual results to differ from
those contained in any forward-looking statements. Forward-looking
statements contained herein speak only as of the date of this press
release, and Rithm and Sculptor expressly disclaim any obligation
to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in Rithm’s and
Sculptor’s expectations with regard thereto or change in events,
conditions or circumstances on which any statement is based.
Additional Information About the Transaction and Where to
Find It
In connection with the proposed transaction, Sculptor intends to
file with the SEC and mail or otherwise provide to its stockholders
a proxy statement regarding the proposed transaction. Sculptor may
also file other documents with the SEC regarding the proposed
transaction. BEFORE MAKING ANY VOTING DECISION, SCULPTOR'S
STOCKHOLDERS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT IN ITS
ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED
WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION OR
INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE
PARTIES TO THE PROPOSED TRANSACTION. Investors and security holders
may obtain a free copy of the proxy statement and other documents
containing information about Rithm, Sculptor and the proposed
transaction, once such documents are filed with the SEC (when
available) from the SEC's website at www.sec.gov, Rithm’s website
at rithmcap.com/investors/ and Sculptor's website at
www.sculptor.com. In addition, the proxy statement and other
documents filed by Sculptor with, or furnished to, the SEC (when
available) may be obtained from Sculptor free of charge by
directing a request to Sculptor's Investor Relations at
investorrelations@sculptor.com.
Participants in the Solicitation
Sculptor and certain of its directors, executive officers and
employees may be considered to be participants in the solicitation
of proxies from Sculptor's stockholders in connection with the
proposed transaction. Information regarding the persons who may,
under the rules of the SEC, be deemed participants in the
solicitation of the stockholders of Sculptor in connection with the
proposed transaction, including a description of their respective
direct or indirect interests, by security holdings or otherwise
will be included in the proxy statement when it is filed with the
SEC. You may also find additional information about Sculptor's
directors and executive officers in Sculptor's proxy statement for
its 2023 Annual Meeting of Stockholders, which was filed with the
SEC on April 28, 2023. You can obtain a free copy of this document
from Sculptor using the contact information above.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230724360729/en/
For More Information, Please Contact:
Rithm – Investor Relations
212-850-7770 ir@rithmcap.com
Sculptor – Shareholder Services
Ellen Conti 212-719-7381 investorrelations@sculptor.com
Sculptor – Media Relations Jonathan
Gasthalter Gasthalter & Co. 212-257-4170
sculptor@gasthalter.com
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