Blue Owl Capital Inc. said Monday it entered an agreement to acquire Oak Street Real Estate Capital LLC and its investment advisory business for $950 million in cash and stock. The deal is expected to close in the fourth quarter. Blue Owl will fund the deal through cash and up to 39 million common units. Oak Street shareholders will be entitled to up to $650 million in earnouts, payable in cash or Blue Owl common units at future dates. The deal is expected to be 5% to 7% accretive to distributable EPS starting in 2022. Chicago-based Oak Street was founded in 2009 and has more than 35 employees and $10.8 billion of assets under management. The company focuses on structuring sale-leasebacks, including triple net leases, and providing seed and strategic capita. “One of the many key synergies with Oak Street is that the firm provides leading products to the high-net-worth and retail channels, a critical part of Blue Owl’s business strategy,” said Blue Owl co-founder and co-president Michael Rees in a statement. Once the deal closes, certain members of Oak Street’s management team will remain in place and the Chicago office will become an additional Blue Owl office. Blue Owl shares were not active premarket, but have gained 40% in the year to date, while the S&P_500 has gained 19%.
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