Ares Doubles Down: $3.7B GCP International Buyout To Supercharge Global Real Estate Portfolio

Ares Management Corporation ARES shares are trading lower after the company disclosed a deal to acquire GCP International in a transaction valued at $3.7 billion.

The deal involves around $1.8 billion in cash and about $1.9 billion in Ares Class A Common Shares, subject to customary adjustments.

The acquisition includes long-term performance incentives to align GCP International’s leadership with the interests of fund clients and Ares stockholders.

As of June 30, 2024, GCP International, which is a global alternative asset management firm, had $44 billion in assets under management (AUM).

This acquisition is expected to position Ares Real Estate as one of the largest global vertically integrated platforms, nearly doubling its AUM to around $96 billion across North America, Europe, Asia, and Latin America.

The deal will occur after GCP International separates from GLP Capital Partners’ remaining business, which will stay independent in Singapore, focusing on Greater China investments.

The transaction is anticipated to close in the first half of 2025, pending customary regulatory approvals and other closing conditions.

The deal is anticipated to be modestly accretive to Ares’ after-tax realized income per share of Class A and non-voting common stock in the first full calendar year post-acquisition, with significant increases in accretion expected in subsequent years.

Michael Arougheti, Chief Executive Officer and President of Ares, said, “As a combined business, we believe that Ares’ and GCP International’s experienced management teams, highly collaborative cultures and investment track records will create a powerhouse in global real assets investing.”

Ming Mei, Co-Founder and CEO of GCP and GLP, stated, “We are excited for the new opportunities the transaction will create for our current clients, and we look forward to continuing to partner with teams across GCP International and Ares to drive success for the combined business.”

Ares Management also announced the launch of an underwritten public offering of 27 million shares of Series B Mandatory Convertible Preferred Stock, par value $0.01 per share.

Investors can gain exposure to the stock via EA Series Trust WHITEWOLF Publicly Listed Private Equity ETF LBO and Segall Bryant & Hamill Trust Segall Bryant & Hamill Select Equity ETF USSE.

Price Action: ARES shares are down 3.15% at $155.50 at the last check Tuesday.

Photo via Shutterstock

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