Blue Owl Buys Atalaya for $450M | Alternative Credit Options Enhanced

Blue Owl Capital has acquired Atalaya Capital Management in a deal valued at $450 million, with the potential to reach $800 million based on future revenue targets. The acquisition, expected to close in the second half of 2024, consists of $350 million in Blue Owl equity and $100 million in cash, with an additional earnout of up to $350 million in equity.

Founded in 2006 by Ivan Zinn, Atalaya Capital Management is a private credit and asset-based lending specialist, managing over $10 billion in assets as of June 30, 2024. The firm has deployed more than $17 billion in capital, with a significant portion sourced directly from asset owners and originators.

The acquisition aligns with Blue Owl's strategy to enhance its alternative credit offerings and expand its asset management capabilities. Blue Owl currently manages approximately $174 billion in assets and plans to leverage Atalaya's expertise in asset-based credit investments across various sectors, including consumer and commercial finance, corporate, and real estate assets.

As part of the deal, Ivan Zinn will join Blue Owl as the head of alternative credit, reporting to Craig Packer, Blue Owl's head of credit and co-president. The majority of Atalaya's approximately 115 employees, including over 50 investment professionals, are expected to transition to Blue Owl and continue managing Atalaya's existing funds.

Blue Owl anticipates the acquisition to be modestly accretive to its earnings in 2025, reflecting the firm's confidence in the strategic fit and growth potential of Atalaya's business model within its broader portfolio.

The acquisition strengthens Blue Owl's position in the private credit market and enhances its overall asset management capabilities, enabling the firm to provide a broader range of financial solutions to its clients.

Our Opinion:

This acquisition seems to be a strategic fit that aligns with their goals of enhancing their alternative credit offerings and expanding their asset management capabilities. By leveraging Atalaya's expertise in asset-based credit investments across various sectors, Blue Owl can provide a more comprehensive suite of financial solutions to their clients. Alternative lenders would be keen to see how this acquisition unfolds and the impact it has on the industry as a whole.

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