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

(RTTNews) - Blue Owl Capital Inc. (OWL), an alternative asset manager, announced Wednesday its definitive purchase agreement to acquire Kuvare Insurance Services LP, dba Kuvare Asset Management, for $750 million.

In pre-market activity on the NYSE, Blue Owl shares were gaining around 2.7 percent to trade at $19.

Blue Owl plans to fund the acquisition through a combination of $325 million in cash and $425 million in Blue Owl Class A common stock.

The acquisition is expected to close in the second or third quarter of 2024 and remains subject to customary regulatory approvals and other closing conditions and specified termination rights.

Upon the deal closure, most Kuvare Asset Management or KAM employees are expected to join Blue Owl. In addition, there is potential for up to a $250 million earnout subject to certain adjustments and achievements of future revenue targets.

KAM provides asset management services to the insurance industry, including Kuvare UK Holdings.

The acquisition is expected to add up to $20 billion in asset under management or AUM for Blue Owl and support the launch of Blue Owl Insurance Solutions.

Separately, Blue Owl announced a long-term investment in Kuvare, purchasing $250 million of preferred equity.

Blue Owl and Kuvare also entered into investment management agreements that will allow Blue Owl to deploy up to $3 billion of assets across its existing Credit, GP Strategic Capital and Real Estate investment platforms, which can grow over time.

These transactions are expected to be accretive to Blue Owl in 2024.

Doug Ostrover, Co-CEO of Blue Owl said, "The creation of Blue Owl Insurance Solutions represents a significant moment in Blue Owl's journey. Our acquisition of KAM allows us to provide broader solutions to the multi-trillion-dollar insurance market at scale. KAM's capabilities in investment grade credit and real estate strategies supplement Blue Owl's existing strength in these asset classes and further accelerate our ability to bring differentiated products and strategies to the market for Kuvare and third-party insurance clients."