Brookfield to buy majority stake in Oaktree

The combined company will have $475 billion in assets under management (AUM) globally, including about $42 billion AUM in Asia, and $2.5 billion of annual fee-related revenues. It will offer a comprehensive suite of alternatives products with expertise across infrastructure, special situations, credit, and private equity. The transaction is expected to close within the year.

Brookfield and Oaktree will continue to operate their respective businesses and brands independently, with each led by its existing management and investment teams. Oaktree co-chairman Howard Marks will join the Brookfield board. The deal allows Brookfield to increase its stake beyond 62% starting in 2022 under terms that could see it take 100% control of Oaktree by 2029.

According to a release, Brookfield will acquire all outstanding Oaktree class A shares for either $49.00 apiece or about 1.1 Brookfield shares per unit. The distributions will be weighted such that the total consideration consists of 50% cash and 50% Brookfield shares.

The offer represents a premium of 12.4% based on the closing price of Oaktree and Brookfield shares on March 12. Oaktree stock spiked 12% on the New York Stock Exchange following the announcement and closed on March 13 at $49.24.

Both firms have meaningful operations in Asia Pacific. Brookfield has about $19 billion in AUM, or about 7.6% of global AUM, and 9,000 operating employees in the region. This compares to about $13 billion, or about 13% of global AUM, for Oaktree. Brookfield operates out of seven offices in the region, while Oaktree currently has six Asia Pacific offices and plans to expand its footprint, especially in India and China.

Recent activity by Brookfield includes the exit of a 36% stake in Australia’s Quadrant Energy in a $2.1 billion deal, the launch of a China renewable energy fund alongside logistics firm GLP, and an approximately $3.2 billion take-private of Australian hospital operator Healthscope. The firm raised $4 billion for its fourth global private equity fund in 2016.

Last year, Oaktree agreed to extend a loan package worth around $36 million to Australia-based Blue Sky Alternative Investments and backed a strategic bolt-on by a portfolio mining services company in the country called DDH1. Oaktree’s other investments around the region include Indian health and fitness app CureFit, which recently raised a $120 million.

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• Topics
• GPs
• Investments
• Buyouts
• Brookfield Asset Management
• Oaktree Capital
• Asia
• Special Situations
• Infrastructure
• Real assets