FX.co ★ Blue Owl Capital To Buy Kuvare Asset Management In $750 Mln Cash, Stock Deal

Blue Owl Capital Inc., an established firm in the alternative asset management industry, has confirmed a deal to take over Kuvare Insurance Services LP, trading as Kuvare Asset Management. The transaction is valued at a hefty $750 million.

Ahead of the market opening on the NYSE, Blue Owl shares are up approximately 2.7 percent, reaching $19 per share.

The acquisition cost is set to be covered via a mix of cash totaling $325 million and $425 million of Blue Owl's Class A common stock. The transaction is forecasted to be completed either in Q2 or Q3 of 2024, pending standard regulatory approval, aligned closing conditions, and stated termination rights.

Post-deal completion, a significant number of Kuvare Asset Management’s workforce is anticipated to become part of the Blue Owl team. There is also scope for an additional earnout of up to $250 million, subject to certain adjustments and the achievement of future revenue targets.

Kuvare Asset Management offers its asset management services to the insurance sector, inclusive of Kuvare UK Holdings. It is estimated that this acquisition will contribute up to $20 billion in assets under management (AUM) for Blue Owl and facilitate the unveiling of Blue Owl Insurance Solutions.

Simultaneously, Blue Owl has declared a long-term investment in Kuvare, buying $250 million of preferred equity.

Additionally, Blue Owl and Kuvare have agreed on investment management contracts. This will enable Blue Owl to apply up to $3 billion of assets across its pre-existing Credit, GP Strategic Capital, and Real Estate investment platforms, with potential for growth in the future.

These business moves are predicted to boost Blue Owl’s financial standing in 2024.

Finally, Co-CEO of Blue Owl, Doug Ostrover, noted, "Establishing Blue Owl Insurance Solutions marks a pivotal point in our company’s timeline. Buying KAM allows us to extend our reach into the multi-trillion-dollar insurance market. KAM’s proficiency in investment-grade credit and real estate strategies will enrich Blue Owl's current presence in such asset classes and will boost our capacity to offer unique products and strategies to Kuvare and third-party insurance clients."