Blue Owl Capital and Atalaya: A Merging Landscape
Blue Owl Capital's acquisition of Atalaya Capital marks a significant shift in the alternative asset management sector. This multi-faceted deal introduces new capabilities and expands financial horizons.
Published July 17, 2024 - 00:07am
The acquisition of Atalaya Capital Management by Blue Owl Capital is set to reshape the landscape of alternative asset management. Announced on July 16, 2024, the deal, worth up to $800 million, underscores the increasing trend of mergers and acquisitions within the private equity sector.
Kirkland & Ellis LLP-advised Blue Owl Capital's plan to acquire Atalaya, assisted by Cravath Swaine & Moore LLP, highlights a strategic effort to enhance its alternative credit capabilities. This acquisition includes $450 million initially, comprising $350 million via Blue Owl equity and an additional $100 million in cash. There's also potential for up to $350 million more, dependent on Atalaya meeting future revenue targets.
Blue Owl Capital, an alternative asset manager based in New York, specializes in direct lending and has recently been expanding its portfolio. Atalaya, also headquartered in New York, manages over $10 billion in assets focused on asset-based credit investments. Their investments spread across consumer and commercial finance, corporate sectors, and real estate.
Doug Ostrover and Marc Lipschultz, co-CEOs of Blue Owl, stressed the strategic value of the acquisition. They noted that Atalaya's long-standing expertise in private asset-based finance complements Blue Owl's existing capabilities in direct lending. They emphasized that Atalaya's differentiated sourcing and underwriting expertise would enrich Blue Owl's offerings.
Ivan Zinn, the founding partner and chief investment officer of Atalaya, viewed Blue Owl as the ideal strategic partner for future growth. Zinn will join Blue Owl as head of alternative credit, reporting to Craig Packer, co-president of Blue Owl. Most of Atalaya's 115 employees are expected to transition to Blue Owl, ensuring continuity in managing existing Atalaya funds.
Financial advisors for Blue Owl in this transaction include Citigroup, MUFG Bank, SMBC, and Wells Fargo. Atalaya's advisors include Mizuho, RBC, and Truist. Legal advisories are provided by Kirkland & Ellis LLP for Blue Owl, and Cravath Swaine & Moore LLP for Atalaya.
Ostrover and Lipschultz commented that the acquisition enhances Blue Owl's market position by adding adjacent and scalable alternative credit solutions. They highlighted Atalaya's pioneering role in asset-based finance, which would bring robust business processes to Blue Owl's repertoire.
Zinn expressed gratitude to Atalaya's investors, team, and partners, underscoring the firm's exceptional track record over nearly two decades. He emphasized that joining Blue Owl represents an exciting phase to remain at the forefront of alternative credit.
The deal is expected to close in the second half of 2024 and is projected to be modestly accretive to Blue Owl's earnings next year. This consolidation of expertise and resources positions Blue Owl to deliver a more comprehensive suite of financing solutions to its stakeholders. The transaction reflects the dynamic nature of the financial industry as firms seek strategic partnerships to bolster their market positions and expand their financial capabilities.