The largest multinational investment company BlackRock Inc. has signed an agreement to acquire the credit company HPS Investment Partners for $12 billion. This is reported in a press release from BlackRock.
About a quarter of the transaction value will be paid over five years, taking into account future performance. In addition, BlackRock plans to repay or refinance HPS debt obligations in the amount of $400 million.
The deal also includes the payment of $675 million to retain employees and will allow BlackRock to become the largest asset management company in the private lending sector. After the deal closes, the value of alternative assets managed by BlackRock will amount to $600 billion.
HPS founders Scott Kapnick, Scot French and Michael Patterson will lead a new private finance solutions development unit within the BlackRock structure.
The transaction is expected to be completed in mid-2025 after regulatory approval.
The deal is in line with BlackRock's strategy to expand its presence in the private lending sector, which is becoming increasingly in demand by pension funds, insurers, sovereign wealth funds and wealthy retail customers and could grow to $20-40 trillion in the near future.
The acquisition of HPS will be the second transaction in the alternative management sector within 10 months. Earlier, BlackRock completed the acquisition of Global Infrastructure Partners for $12.5 billion, becoming the second largest company in the infrastructure assets sector. In addition, BlackRock is negotiating the buyout of Preqin Ltd. for 2.55 billion pounds ($3.3 billion).
With the acquisition of HPS, BlackRock's alternative investment business will surpass Carlyle Group Inc. and allow it to compete with KKR&Co. and Apollo Global Management Inc.
Perella Weinberg Partners and Morgan Stanley act as financial advisers to BlackRock, while JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp., Deutsche Bank AG, BNP Paribas SA and Royal Bank of Canada act as consultants to HPS.
HPS is one of the largest independent asset management companies in the private lending market. The company has assets worth $100 billion under management. In 2016, HPS bought out its stake from JPMorgan Chase&Co as part of a complex deal. for $1 billion. The headquarters is located in New York (USA).
BlackRock, Inc. is an American international investment company headquartered in New York (USA). The company offers index funds and funds with active investment management to its clients. Index funds invest in securities included in stock indexes. BlackRock manages $11.5 trillion in assets. The company was originally part of the Blackstone Group.
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