Blue Owl Capital Inc. (OWL) announced that it has completed the acquisition of Prima Capital Advisors from funds managed by Stone Point Capital LLC. The move aims to increase the company's presence in the real estate market and further diversify its offerings on its platform.
The transaction, announced in April 2024, also shaped Blue Owl's real estate finance strategy. Under the terms of the transaction, the company paid approximately $157 million in stock and $13 million in cash. An additional earn-out of up to $35 million will be paid in the form of stock if certain milestones are met. Prima employees are expected to join Blue Owl.
Founded in 1992, Prima is a real estate lender focused on investing primarily in commercial mortgage-backed securities. As of March 31, 2024, Prima has approximately $10 billion in assets under management and serves as the foundation for OWL's real estate financing strategy.
Additionally, in April of this year, Blue Owl announced the addition of Jesse Hom to lead the newly launched real estate finance strategy and serve as chief investment officer for the real estate platform. Hom's responsibilities will include working on the existing triple net lease business as well as identifying strategic opportunities to develop and enhance the scalability of the real estate platform.
The move is in line with OWL's inorganic growth strategy of undertaking opportunistic acquisitions that add value to its existing businesses.
In parallel, Blue Owl signed an agreement in April to acquire Kuvare Insurance Services LP, doing business as Kuvare Asset Management, for $750 million, a transaction that is likely to have a positive impact on the company's financials this year. Additionally, through this acquisition, the company will launch Blue Owl Insurance Solutions, which offers partnerships with insurance companies that generate favorable returns and alpha in a risk-based framework, complementing the company's larger institutional and private wealth capital raising channels.
In December 2023, Blue Owl completed the acquisition of CHI, strengthening its presence in the life sciences sector. In August 2023, the company completed the acquisition of Par Four, strengthening its liquidity credit strategies team.
Management remains interested in pursuing strategic acquisitions in the future.
Over the past six months, Blue Owl shares have risen 26%, compared with the industry's growth of 11.3%.
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Currently, OWL has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Completed acquisition by another financial services company
Last month, LPL Financial Holdings Inc. (LPLA) completed its acquisition of Crown Capital Securities Inc. The transaction, announced in July 2023, expands the company's footprint in the California market and strengthens its asset management business.
The acquisition is a strategic move for LPLA, strengthening its position as a leading wealth management services provider. The company's industry-leading platform will provide Crown Capital advisors with enhanced operational support, streamlined processes and cutting-edge technology and integrated advisor tools. Crown Capital advisors will benefit from LPL Financial's robust infrastructure while maintaining their independence and continuing to serve clients with the same dedication and commitment they have demonstrated for many years.
Similarly, BlackRock Inc. BLK has completed the acquisition of SpiderRock Advisors, LLC, a leading provider of option overlay-based strategies for separately managed accounts (SMAs), enhancing the company's ability to offer clients a robust platform with customized SMA solutions.
The acquisition (announced in March 2024) is an extension of BLK's 25% minority investment in the company in 2021 and strengthens its commitment to personalized SMA. Financial terms of the transaction remain confidential and the acquisition will have an immaterial impact on revenue in 2024.
Given the diverse and unique characteristics of the services offered, the transaction is expected to strengthen BLK's SMA solutions and address the growing demand for personalized tax-saving portfolios by asset managers.
The story continues
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