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Ares Management to combine with Kayne Anderson Capital for $2.55 billion
By Lisa Kerner
Charlotte, N.C., July 24 – Ares Management, LP announced it will provide $2.55 billion in consideration to combine with Kayne Anderson Capital Advisors, LP to create Ares Kayne Management, LP.
“We expect to issue $1.8 billion of new equity in the form of Ares Operating Group units locked in at a price of $19 per unit, and we plan to finance the remaining cash portion using one or more financing options available to us, including draws on our $1 billion revolving credit facility and, subject to market conditions, other sources of permanent debt,” said Ares president Michael Arougheti during a conference call on Friday.
Arougheti said the equity-to-cash split is at Ares’ discretion and would be between $1.8 billion and $2.05 billion.
Post-merger, the combined company is expected to have a debt leverage of about 3.2 times.
The transaction is slated to close on or around Jan. 1.
Ares Kayne will have approximately 450 investment professionals in more than 20 offices worldwide and will be a leading manager of publicly traded yield-oriented vehicles, according to a news release.
Upon closing, Kayne Anderson chairman and founder Richard Kayne and Ares’ chairman and chief executive officer Tony Ressler will serve together as co-chairmen.
Ares Management is a Los Angeles-based asset manager with $87 billion in assets under management. The company has four investment groups: tradable credit, direct lending, private equity and real estate.
Kayne Anderson has $26 billion of assets under management and is also based in Los Angeles. The asset management firm focuses on niche investments in upstream energy, energy infrastructure, specialty real estate, credit and growth private equity.
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