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Carlyle (CG) to Boost Fee Income by Acquiring CBAM's Assets
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The Carlyle Group Inc. (CG - Free Report) recently announced that it has agreed to acquire a portfolio of assets from CBAM Partners. The deal is expected to close in the first half of 2022, subject to certain customary closing conditions.
The acquisition is a stock-and-cash deal constituting $615 million in cash and approximately 4.2 million newly issued common shares of Carlyle. The transaction is expected to bolster Carlyle’s already strong collateralized loan obligation (“CLO”) business and make the company the world’s largest CLO manager.
Acquisition of CBAM’s assets will increase Carlyle’s CLO asset under management (“AUM”) to approximately $48 billion. Carlyle’s Global Credit platform is expected to accelerate to an AUM of $88 billion from $73 billion as of Dec 31, 2021. This will result from an integration of $15 billion AUM of CBAM, consisting primarily of CLO funds.
Synergies from the acquisition will have an immediate and accretive impact on Carlyle’s fee-related earnings and distributable earnings per common share. The company is also acquiring certain other private credit assets of CBAM that fit strategically into its Credit platform.
Carlyle’s Global Credit platform has been the fastest-growing segment in the past four years. The company has expanded its platform through several acquisitions. It has entered into an agreement to acquire $3 billion of net lease real estate portfolio from iStar, which is expected to close during the first quarter of 2022. Further, the acquisition of Fly Leasing and the agreement to acquire AMCK Aviation's aircraft portfolio are expected to close in the second quarter of the year.
Carlyle is growing organically through an increase in its AUM balance and fund management fees. Further, its expansion of operations in infrastructure and real-estate credit might drive the top line. These efforts are expected to bode well for the company’s long-term prospects.
Over the past year, shares of CG have rallied 18.2%, outperforming the 0.2% growth of the industry.
While rampant political and regulatory scrutiny of mergers and acquisitions of large banks might aggravate the execution risk for future deals, it is not discouraging banks from consolidation activities.
Last week, First Horizon Corporation (FHN - Free Report) and TD Bank Group (TD - Free Report) signed a definitive agreement, whereby the latter will acquire FHN in an all-cash deal valued at $13.4 billion or $25 for each FHN common share.
TD anticipates the FHN acquisition to close by Nov 1, 2022.
The buyout is subject to customary closing conditions, including approvals from First Horizon's shareholders, and the U.S. and Canadian regulatory authorities.
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Carlyle (CG) to Boost Fee Income by Acquiring CBAM's Assets
The Carlyle Group Inc. (CG - Free Report) recently announced that it has agreed to acquire a portfolio of assets from CBAM Partners. The deal is expected to close in the first half of 2022, subject to certain customary closing conditions.
The acquisition is a stock-and-cash deal constituting $615 million in cash and approximately 4.2 million newly issued common shares of Carlyle. The transaction is expected to bolster Carlyle’s already strong collateralized loan obligation (“CLO”) business and make the company the world’s largest CLO manager.
Acquisition of CBAM’s assets will increase Carlyle’s CLO asset under management (“AUM”) to approximately $48 billion. Carlyle’s Global Credit platform is expected to accelerate to an AUM of $88 billion from $73 billion as of Dec 31, 2021. This will result from an integration of $15 billion AUM of CBAM, consisting primarily of CLO funds.
Synergies from the acquisition will have an immediate and accretive impact on Carlyle’s fee-related earnings and distributable earnings per common share. The company is also acquiring certain other private credit assets of CBAM that fit strategically into its Credit platform.
Carlyle’s Global Credit platform has been the fastest-growing segment in the past four years. The company has expanded its platform through several acquisitions. It has entered into an agreement to acquire $3 billion of net lease real estate portfolio from iStar, which is expected to close during the first quarter of 2022. Further, the acquisition of Fly Leasing and the agreement to acquire AMCK Aviation's aircraft portfolio are expected to close in the second quarter of the year.
Carlyle is growing organically through an increase in its AUM balance and fund management fees. Further, its expansion of operations in infrastructure and real-estate credit might drive the top line. These efforts are expected to bode well for the company’s long-term prospects.
Over the past year, shares of CG have rallied 18.2%, outperforming the 0.2% growth of the industry.
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Carlyle currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Growth Efforts by Other Firms
While rampant political and regulatory scrutiny of mergers and acquisitions of large banks might aggravate the execution risk for future deals, it is not discouraging banks from consolidation activities.
Last week, First Horizon Corporation (FHN - Free Report) and TD Bank Group (TD - Free Report) signed a definitive agreement, whereby the latter will acquire FHN in an all-cash deal valued at $13.4 billion or $25 for each FHN common share.
TD anticipates the FHN acquisition to close by Nov 1, 2022.
The buyout is subject to customary closing conditions, including approvals from First Horizon's shareholders, and the U.S. and Canadian regulatory authorities.