Blue Owl Capital Inc. OWL or Blue Owl signed a definitive agreement to acquire the business of digital infrastructure fund manager IPI Partners, LLC ("IPI") from an affiliate of ICONIQ Capital ("ICONIQ") and an affiliate of Iron Point Partners (Iron Point) for a purchase price of nearly $1 billion.
This acquisition is intended to capitalize on the burgeoning market opportunity for financing data centers and the growing investor appetite for cloud and AI-driven investment methods.
The purchase price will comprise approximately 80% Blue Owl equity and about 20% cash.
The acquisition is expected to conclude in the fourth quarter of 2024 or the first quarter of 2025, subject to certain closing circumstances such as third-party consent.
The deal is expected to be neutral to Blue Owl's earnings in 2025 and somewhat accretive in 2026. OWL will collaborate with an ICONIQ affiliate to ramp up the company's future growth.
IPI was formed in 2016 as a joint venture between ICONIQ and Iron Point to meet the demands of big, high-quality hyperscale and corporate data center customers. As of June 30, 2024, IPI had nearly $10.5 billion in assets under management.
The IPI platform has developed into one of the largest private U.S.-based data center investors, with a portfolio of 82 data centers spanning the United States, EMEA and APAC, with more than 2.2GW of leased capacity. Tenants are mostly investment-grade enterprises, including a few Fortune 100 companies.
The firm is headquartered in Chicago, Illinois and employs over 70 people in global offices, including more than 50 investment professionals. IPI staff are expected to join Blue Owl and continue to manage IPI's current funds.
Following the acquisition, IPI's company will strengthen OWL's digital infrastructure strategy as part of the firm's Real Estate platform, which will continue to be directed by Blue Owl Co-President Marc Zahr. Matt A'Hearn, Managing Partner at IPI, will become Head of Blue Owl's digital infrastructure strategy, reporting to Co-President Marc Zahr.
An ICONIQ affiliate will engage in an arrangement with Blue Owl to supply business services such as investment analysis and investor relations. In exchange for these services, an ICONIQ affiliate is eligible for service fees based on specific future targets. The company anticipates that these payments will be made in 2026 and 2028.
Blue Owl's Co-CEOs, Doug Ostrover and Marc Lipschultz said, "The acquisition of IPI with its deep sector expertise complements our existing net lease strategy while providing an ideal opportunity to expand Blue Owl's digital infrastructure strategy. There is a massive market opportunity to finance data centers, matched by an increasing investor appetite for additional strategies investing behind cloud and AI-driven secular tailwinds. IPI's tenured investment team, preeminent LP-base and global scale in the digital infrastructure economy will enhance our suite of capital solutions and investment offerings, further strengthening our position as a partner of choice. Investors can benefit greatly from the combination of Blue Owl's triple net lease knowledge and IPI's depth in the data centers market."
Matt A'Hearn, Managing Partner of IPI stated, we are incredibly excited to join Blue Owl and serve as the foundation for expanding the firm's digital infrastructure strategy, further complementing their market-leading net lease strategy. We are also grateful to our partners at ICONIQ and Iron Point, who were instrumental in helping us become one of the most scaled digital infrastructure managers. We believe there's a tremendous amount that IPI can accomplish within the Blue Owl ecosystem alongside our partners at ICONIQ, and look to extend our market-leading position."
Tom Lynch, a Managing Partner at Iron Point, added, "We are proud to have been partners with ICONIQ in the formation and growth of IPI, and we are confident that the addition of Blue Owl will enable IPI to achieve even greater scale to meet the needs of the world's largest technology companies."
Last week, BlackRock, Inc. BLK acquired a private equity company, Global Infrastructure Partners (“GIP”).
This acquisition has created an industry leader in infrastructure, spanning equity, debt, and solutions and offering a wide variety of infrastructure sector knowledge and exposure in existing and emerging economies. The combined infrastructure platform is likely to brand as Global Infrastructure Partners, a division of BlackRock.
GIP's exclusive origination and business improvement capabilities, combined with BlackRock's worldwide corporate and sovereign contacts, create a platform for diversified, large-scale sourcing to support client deal flow and co-investment opportunities.
Similarly, LPL Financial Holdings LPLA , along with its subsidiaries LPL Financial LLC, has completed the acquisition of Altria Wealth Solutions, Inc. (Altria).
Per the acquisition announced on Feb. 13, 2024, LPLA expected onboarding and integration costs to be between $300 million and $350 million. Despite these expenses, the long-term financial projections are promising, with LPLA anticipating additional earnings of $140 million annually from the deal.
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