Blue Owl Capital To Acquire Oak Street Real Estate For $950 Mln In Cash, Stock

Alternative asset manager Blue Owl Capital Inc. (OWL) announced Monday a definitive merger agreement to acquire Oak Street Real Estate Capital, LLC, a diversified real estate investment firm, and its investment advisory business, for $950 million.

Chicago-based Oak Street, founded in 2009, has over 35 employees and $10.8 billion of assets under management as of June 30, 2021.

The acquisition is expected to close in the fourth quarter of 2021, subject to customary closing conditions.

The transaction is anticipated to be around 5 percent to 7 percent accretive to distributable earnings per share starting in 2022.

The company will fund the deal price through a combination of cash and up to an aggregate of around 39 million Blue Owl common units issuable at closing. In addition, upon the achievement of certain performance thresholds, Oak Street equity holders will be entitled to earnouts up to a total of approximately $650 million, payable in cash at future dates or in Blue Owl common units.

Upon the deal closure, Oak Street's key executives team will remain in place leading the business, and Oak Street's Chicago office will become an additional office for Blue Owl. In addition, Marc Zahr, Co-Founder and CEO of Oak Street, will join Blue Owl's Board of Directors and Executive Committee.

In the deal, Kirkland & Ellis LLP acted as legal counsel to Blue Owl. Berkshire Global Advisors served as financial advisor and Willkie Farr & Gallagher LLP acted as legal counsel to Oak Street.

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