Ares Management Corporation (ARES) is making waves in the real estate investment world with its recent announcement of a $3.7 billion acquisition of GCP International. The deal, which involves a combination of cash and Ares Class A Common Shares, signifies a major strategic move for the company.
GCP International, a global alternative asset management firm with $44 billion in assets under management (AUM) as of June 30, 2024, will become part of the Ares family. This acquisition is expected to propel Ares Real Estate into the ranks of the largest global vertically integrated platforms, nearly doubling its AUM to an impressive $96 billion across North America, Europe, Asia, and Latin America.
The acquisition will occur after GCP International separates from GLP Capital Partners’ remaining business, which will remain independent in Singapore, focusing on investments in Greater China. The transaction is expected to close in the first half of 2025, subject to customary regulatory approvals and other closing conditions.
This strategic move is expected to be financially beneficial for Ares. 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.
The acquisition is a testament to the shared vision of both companies. Michael Arougheti, Chief Executive Officer and President of Ares, expressed his confidence in the combined business, stating, “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, echoed this sentiment, stating, “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.”
In addition to the acquisition, Ares Management also announced an underwritten public offering of 27 million shares of Series B Mandatory Convertible Preferred Stock. Investors can gain exposure to the stock through various investment vehicles, including the EA Series Trust WHITEWOLF Publicly Listed Private Equity ETF LBO and Segall Bryant & Hamill Trust Segall Bryant & Hamill Select Equity ETF USSE.
The news of the acquisition has had an impact on Ares’ stock price. ARES shares are down 3.15% at $155.50 at the last check on Tuesday.
