The acquisition will add CBAM’s $15bn assets under management (AUM), which are in CLO funds, to Carlyle’s Global Credit platform
Carlyle to buy CBAM’s asset portfolio. (Credit: aymane jdidi from Pixabay)
US-based private equity investment firm Carlyle has agreed to acquire a portfolio of assets from CBAM Partners, a capital market company of Eldridge, for a total of $787m.
Carlyle will fund the acquisition using a combination of $615m in cash from its balance sheet and issuing around 4.2 million common shares worth nearly $172m.
The acquisition will add CBAM’s assets under management (AUM), worth $15bn, to Carlyle’s Global Credit platform.
The majority of the CBAM’s assets are in collateralised loan obligation (CLO) funds.
The deal is expected to increase Carlyle’s CLO AUM to reach around $48bn, and strengthen Carlyle’s position as a CLO manager.
In addition to CLO assets, Carlyle will also acquire certain other CBAM assets across private credit business that strategically suits Carlyle’s Global Credit platform.
The transaction is expected to complete in the first half of 2022, subject to satisfaction of certain customary closing conditions.
Carlyle global credit head Mark Jenkins said: “Acquiring these assets from CBAM adds scale to our already strong CLO business and creates shareholder value on day one by delivering a substantial and accretive increase in Fee Related Earnings.
“This transaction builds on our strong momentum as we continue growing the global credit platform in line with our strategic plan.”
The transaction is expected to be immediately accretive to and impact Carlyle’s Fee Related Earnings and Distributable Earnings per common share.
Through the deal, the company aims to scale its Global Credit platform, which raised $17bn last year, driven in large part by CLO issuances.
To expand the platform, Carlyle has acquired Fly Leasing and agreed to buy AMCK Aviation’s aircraft portfolio, which is expected to close in the second quarter of this year
In addition, the company signed an agreement to buy a $3bn net lease real estate portfolio from iStar, which is expected to close during the first quarter.
BofA Securities served as a financial advisor, and Weil, Gotshal & Manges as legal advisor to CBAM, while Latham & Watkins served as legal advisor to Carlyle, on the transaction.
Carlyle liquid credit co-head and US loans and structured credit head Lauren Basmadjian said: “We have a strong track record of acquiring and integrating CLO portfolios and are excited to incorporate these CBAM assets into our platform.
“Through this transaction, we will build on our leading position in the growing leveraged loan and CLO asset classes and enhance our role as a key partner to investors and borrowers.”