Ares Management announced on Tuesday its agreement to acquire the international business of GLP Capital Partners and certain affiliated entities in a cash-and-stock transaction valued at approximately $3.7 billion. The consideration is structured with $1.8 billion in cash and $1.9 billion in Ares' class A shares, which are subject to adjustments based on market conditions at the time of closing, according to a joint statement from both firms.
Notably, the transaction explicitly excludes GLP Capital's operations in China and existing capital commitments to specific managed funds, with GLP Capital being the investment and asset management branch of GLP Pte. This strategic acquisition is pending regulatory approval, and the expected completion is slated for the first half of the coming year.
Ares Management has successfully secured fully committed bridge financing to facilitate this acquisition, showcasing their confidence in this significant investment move. Ares' Chief Executive, Michael Arougheti, expressed optimism regarding the combined business operations, stating, "As a combined business, we believe that Ares' and GCP International's experienced management teams, highly collaborative cultures, and established investment track records will create a powerhouse in global real assets investing." This partnership aims to enhance synergies and expand each firm's market reach, effectively positioning them to capitalize on emerging opportunities in the sector. As of June 30, GLP Capital's international business boasts an impressive portfolio of $44 billion in assets under management (AUM).
Post-acquisition, Ares anticipates the deal will nearly double its Real Estate AUM to approximately $96 billion, significantly enhancing its competitive edge in North America, Europe, Asia, and Latin America. The alternative investment manager projects that this deal will be modestly accretive to its after-tax realized income on a per-share basis within the first calendar year following the completion, with expectations of “meaningfully” faster accretion in subsequent years as synergies begin to materialize. Another significant aspect of this deal is the separation of GLP Capital’s international operations, which will continue to maintain its headquarters in Singapore.
Notably, key executives such as Michael Steele, president of the international division, along with leadership teams overseeing funds in the US, Japan, Europe, Brazil, and Vietnam, will transition to Ares, fostering an integrated operational framework post-acquisition. GLP’s CEO Ming Mei highlighted the positive outlook for current clients, stating, "We are excited for the new opportunities the transaction will create for our current clients, and we look forward to continuing to partner with teams across GCP International and Ares to drive success for the combined business." This collaboration emphasizes a shared commitment to delivering enhanced investment solutions and sustained growth in a dynamic market environment. Price: 156.29, Change: -4.27, Percent Change: -2.66.