Owl Rock Capital Partners LP and Dyal Capital Partners agreed to merge in a complicated deal that would make them public through a blank check company.
The new company, named Blue Owl, would combine one of the largest owners of private equity firm stakes with Owl Rock, a fast-growing credit investor. It would be estimated at about $ 12.5 billion.
The Wall Street Journal reported earlier this month that the companies were discussing such a deal.
The companies intend to go public via a merger with Altimar Acquisition Corp.
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, a specialty acquisition company sponsored by a subsidiary of HPS Investment Partners LLC. The deal also includes additional funds of approximately $ 1.5 billion from institutional investors.
Blue Owl would be headed by Owl Rock co-founder Doug Ostrover as its chief executive.
SPAC mergers have become extremely popular in recent times as an alternative to traditional IPOs. This deal, assuming shareholders approve it, would be one of the largest such transactions. It is the second largest SPAC transaction announced in the US this year, overshadowed only by a deal to disclose mortgage lender United Wholesale Mortgage at a valuation of approximately $ 16 billion.
The deal is also one of the few cases where two companies merge with each other and a SPAC at the same time. Sports betting operator DraftKings Inc.
merged with a gaming technology provider as part of a deal it made public through a SPAC earlier this year.
Founded in 2011 by Lehman Brothers veterans Michael Rees and Sean Ward, Dyal is the largest owner of minority stakes in private equity firms, credit shops and hedge funds. It already owns shares in both Owl Rock and HPS.
Dyal has been a part of Neuberger Berman Group LLC, the large private equity firm, throughout its existence. Neuberger would retain an interest 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.
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banker Craig Packer. It has grown to $ 23.7 billion in assets primarily managed through business development companies.
The company focuses on a fast-growing area known as direct lending, in which non-banks provide loans to medium-sized companies, many of which are backed by private equity, and keep them on their books. Such lenders have been on the rise since the aftermath of the 2008-2009 financial crisis, when banks were shedding many of their riskier businesses.
Perella Weinberg Partners LP, Goldman Sachs & Co. LLC and BofA Securities Inc. are financial advisors to Owl Rock. Ardea Partners LP is financial advisor to Neuberger Berman and Dyal; Evercore Group LLC is Dyal’s financial advisor; and JP Morgan Securities LLC is Altimar’s financial advisor. Citigroup and UBS also advise Neuberger Berman.
Write to Cara Lombardo at [email protected] and Miriam Gottfried at [email protected]
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