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Blue Owl Capital Considers Acquiring IPI Partners for Roughly $1B

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Blue Owl Capital Inc. (OWL - Free Report) is in discussions to buy IPI Partners, a firm that invests in data centers and other digital infrastructure, for approximately $1 billion. This was reported by Bloomberg, citing people with knowledge of the matter.

IPI Partners, which is led by managing partner Matt A’Hearn, is a joint venture of Iconiq Capital and Iron Point Partners.

The deal could be announced later this month if an agreement is established between the entities, stated one of the people.

Reasons Behind OWL’s Acquisition Pursuit

Alternative asset managers have been attempting to diversify the company’s product offerings given the interest from investors, known as limited partners. These investors have been reducing the number of firms for capital allocation, as they prefer to invest in companies offering diversified services. Thus, such diversification will help to attract further capital from investors.

Hence, these factors have been driving OWL to be an active acquirer as it diversifies the company’s product offerings. Last month, the company acquired Atalaya Capital Management LP to expand its alternative credit presence and reinforce OWL’s market-leading position in direct lending.

Further, this July, Blue Owl acquired Kuvare Insurance Services LP, doing business as Kuvare Asset Management. With this, the company launched Blue Owl Insurance Solutions to expand its relationships with insurance companies and provide the firm with a large and diversified source of capital.

Similarly, this June, OWL acquired Prima Capital Advisors from funds managed by Stone Point Capital LLC. This move aims to boost the company’s presence in the real estate market. The deal also led to the formation of Blue Owl’s Real Estate Finance strategy.

Further, in December 2023, Blue Owl closed the CHI acquisition, strengthening its presence in the life sciences sector. In August 2023, the company closed the Par Four acquisition, enhancing its liquid credit strategy team. These moves align with OWL’s inorganic growth strategy to engage in opportunistic buyouts that are value-accretive to its existing businesses.

Blue Owl Capital’s Zacks Rank & Price Performance

In the past six months, shares of Blue Owl Capital have gained 5.7% compared with the industry’s 15.7% growth.

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

Similar Steps Taken by Other Finance Firms

This week, BlackRock, Inc. (BLK - Free Report) 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 - Free Report) , 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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