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BlackRock (BLK) to Buy Kreos, Enhance Private Debt Products

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BlackRock, Inc. (BLK - Free Report) has signed an agreement to acquire London-based Kreos Capital, a private debt provider. The financial terms of the deal were not disclosed.

Closing of the transaction, still subject to customary regulatory and closing conditions, is expected in the third quarter of 2023. The financial impact of the transaction will have no material impact on BlackRock's earnings.

Kreos Capital is a well-known debt provider that invests in technology and health sectors across Israel and European high-growth companies. Since 1998, the firm has invested more than €5.2 billion through nearly 750 transactions across 19 countries.

The acquisition of Kreos Capital will further bolster BlackRock's position as the global credit asset manager. It is also expected to further expedite BLK's goal to provide its clients with a wide range of private market investment products and services. The deal will complement BlackRock's Global Credit business and their clients will have access to Kreos' additional private debt capabilities.

James Keenan, CIO and global head of BlackRock Private Credit, said, " The Kreos team has built a world class investment process and delivered for clients through multiple cycles. Coupled with our expectation that growth and venture lending will figure prominently in the expansion of the global direct lending opportunity set going forward, we believe this is an opportune time to welcome the Kreos team to BlackRock."

Mårten Vading, co-founder and general partner of Kreos Capital, stated, "As a pioneer of private debt solutions for high growth technology and healthcare companies in Europe and Israel, Kreos is now taking the next step by accelerating the business and partnering with BlackRock. The transaction enables us to leverage BlackRock’s scale, resources, and technology to create a holistic product offering that serves innovative companies globally."

Over the years, BLK has expanded its product offerings through strategic acquisitions, thereby enhancing its platforms. In 2021, it acquired the Climate Change Scenario Model of Baringa Partners and the investment management services provider, Aperio Group. By expanding its operations through acquisitions for the past several years, the company has made efforts to ensure top-line growth despite expectations of an economic slowdown.

After the deal completion, Kreos Capital's existing leadership will continue to be responsible for executing its proven investment strategies. Its investment team will become part of BlackRock’s European Private Debt platform.

Over the past six months, shares of BLK have fallen 4.1% compared with the industry’s decline of 1.4%.


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Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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