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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 2, 2024
BLUE OWL CAPITAL INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-39653 | 86-3906032 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
| 399 Park Avenue, New York, NY 10022 |
| (address of principal executive offices) |
(212) 419-3000
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading symbol(s) |
Name of each exchange on which registered |
||
| Class A Shares | OWL | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 3.02. Unregistered Sales of Equity Securities.
At the closing of the Acquisition (as defined below), Blue Owl Capital Inc. (the “Company”) will deliver approximately 23,519,645 shares of the Company’s Class A common stock, par value $0.0001 per share (the “Class A Shares”), representing an aggregate value of $425 million and calculated based on the daily volume weighted average price per share of Class A Shares quoted on the US Consolidated Tape for the 15 consecutive trading days immediately before signing per Bloomberg Financial LP (subject to certain adjustments calculated at closing) (the “Closing Stock Consideration”). Subject to such closing adjustments, the Company may elect to pay additional cash consideration in lieu of issuing additional Class A Shares.
The Class A Shares will be issued pursuant to and in accordance with the exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) provided by Section 4(a)(2) thereof as a transaction by an issuer not involving any public offering.
Item 7.01. Regulation FD Disclosure.
On April 2, 2024, Blue Owl Capital Holdings LLC, a Delaware limited liability company, and Blue Owl Capital GP LLC, a Delaware limited liability company, each an indirect subsidiary of the Company (collectively, the “Buyers”), entered into a definitive agreement (the “Purchase Agreement”) to acquire Kuvare Insurance Services LP (dba Kuvare Asset Management), a boutique investment management firm focused on providing asset management services to the insurance industry (the “Acquisition”). The aggregate consideration for the Acquisition is $750 million, consisting of $325 million in cash and the Closing Stock Consideration. At the closing of the Acquisition, $175 million of the Closing Stock Consideration (or any proceeds received in respect of such portion of the Closing Stock Consideration) will be deposited in trust or other secured account and held for three years to serve as a source of capital support for certain of the subsidiaries of Kuvare UK Holdings Limited, a private company limited by shares incorporated in England and Wales (“KUK”), that are operating insurance companies, subject to certain triggers and limitations mutually agreed between the parties. In addition, in connection with the Acquisition and subject to the achievement of certain revenue milestones with respect to each of calendar year 2025, 2026 and 2027, to be payable in 2026, 2027 and 2028, the Buyers agreed to deliver earnout consideration of up to $250 million in cash. The agreement relating to the Acquisition contains customary representations, warranties and agreements by the parties and termination provisions. The Acquisition is subject to customary regulatory approvals and other closing conditions and specified termination rights. The Acquisition is expected to close in the second or third quarter of 2024.
Concurrently with the closing of the Acquisition, the Company will agree to provide certain selling entities with customary registration rights with respect to the issued Class A Shares.
Separately, Blue Owl Capital Holdings LP, a subsidiary of the Company (the “Blue Owl Investor”) purchased from KUK 25,000,000 series A preferred shares (the “Preferred Shares”), representing an aggregate value of $250 million (the “Preferred Investment”).
On April 3, 2024, the Company issued a press release announcing the Acquisition and the Preferred Investment. A copy of the press release is attached hereto as Exhibit 99.1.
On April 3, 2024, the Company posted an investor presentation to its website under the heading “Events and Presentations” (https://ir.blueowl.com/Investors/events-and-presentations/), summarizing certain terms of the Acquisition and the Preferred Investment.
The information in this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 8.01. Other Events.
The disclosure set forth in the first paragraph of Item 7.01 of this Form 8-K is incorporated by reference into this Item 8.01.
Forward-Looking Statements
Certain statements made in this Current Report on Form 8-K are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “should,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and speak only as of the date made. The Company assumes no obligation to update or revise any such forward-looking statements except as required by law. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include the risk of the Acquisition not closing on a timely basis, if at all; the inability to recognize the anticipated benefits of strategic acquisitions; costs related to acquisitions; the inability to maintain the listing of the Company’s shares on the New York Stock Exchange; Company’s ability to manage growth; Company’s ability to execute its business plan and meet its projections; potential litigation involving the Company; changes in applicable laws or regulations; and the possibility that the Company may be adversely affected by other economic, business, geo-political and competitive factors.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 99.1 | Press Release of the Company, dated April 3, 2024. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BLUE OWL CAPITAL INC. | ||||||
| Date: April 3, 2024 |
|
By: | /s/ Neena Reddy |
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Name: | Neena Reddy | |||
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Title: | General Counsel and Secretary | |||
Exhibit 99.1
Blue Owl Capital to Acquire Kuvare Asset Management for $750 Million
| • | Acquisition will add up to $20 billion in AUM for Blue Owl and support the launch of Blue Owl Insurance Solutions |
| • | Blue Owl also invested $250 million in Kuvare UK Holdings |
NEW YORK, April 3rd, 2024 — Blue Owl Capital Inc. (“Blue Owl”) (NYSE: OWL), a leading alternative asset manager, announced today it has entered into a definitive purchase agreement to acquire Kuvare Insurance Services LP (dba Kuvare Asset Management) (“KAM”) for $750 million. KAM is a boutique investment management firm focused on providing asset management services to the insurance industry, including Kuvare UK Holdings (“Kuvare”). Blue Owl will fund the KAM acquisition through a combination of $325 million in cash and $425 million in Blue Owl Class A common stock. The KAM acquisition is expected to close in the second or third quarter of 2024 and remains subject to customary regulatory approvals and other closing conditions and specified termination rights. Upon closing of the KAM acquisition, most KAM employees are expected to join Blue Owl. In addition, there is potential for up to a $250 million earnout subject to certain adjustments and achievements of future revenue targets.
Separately, Blue Owl made a long-term investment in Kuvare today, purchasing $250 million of preferred equity. This investment creates long-term alignment between Blue Owl and Kuvare and provides valuable growth capital to Kuvare’s insurance companies, each of which will become new asset management clients of Blue Owl. Founded in 2015, Kuvare is a technology-enabled financial services firm operating several insurance and reinsurance businesses and has become a top 20 fixed and indexed annuity writer in the United States. Kuvare’s business segments include retail, institutional reinsurance and specialty insurance advisory services.
In addition to the preferred equity investment, Blue Owl and Kuvare entered into investment management agreements (“IMAs”) that will allow Blue Owl to deploy up to $3 billion of assets across its existing Credit, GP Strategic Capital and Real Estate investment platforms, which can grow over time. Upon the closing of the KAM acquisition, Blue Owl will be allocated up to $20 billion of AUM, in aggregate. Kuvare will continue to manage the overall asset allocations for its insurance businesses and strategic investments. Blue Owl’s IMAs with Kuvare insurance companies will be additive to Blue Owl’s permanent capital base while enhancing Kuvare’s investment capabilities.
These transactions are expected to be accretive to Blue Owl in 2024.
Doug Ostrover, Co-CEO of Blue Owl said: “The creation of Blue Owl Insurance Solutions represents a significant moment in Blue Owl’s journey. Our acquisition of KAM allows us to provide broader solutions to the multi-trillion-dollar insurance market at scale. KAM’s capabilities in investment grade credit and real estate strategies supplement Blue Owl’s existing strength in these asset classes and further accelerate our ability to bring differentiated products and strategies to the market for Kuvare and third-party insurance clients.”
Marc Lipschultz, Co-CEO of Blue Owl said: “Our preferred equity investment in Kuvare reflects our confidence in the growth trajectory of the business; both through its extensive distribution network and proven reinsurance strategy. This partnership with Kuvare anchors Blue Owl’s expanding presence in the insurance channel, greatly complementing our robust institutional and wealth footprint and further diversifying the markets for which we provide investment solutions. In aggregate, we believe these transactions reflect a creative approach to expanding our offerings for the insurance market at an attractive price.”
Dhiren Jhaveri, Founder, Chairman and CEO of Kuvare added: “It is an important and exciting step in the evolution of Kuvare to associate in such an impactful way with an asset manager of Blue Owl’s caliber. We always strive to be excellent stewards of assets entrusted to us by our policyholders and reinsurance partners, and the team at Blue Owl has demonstrated a unique commitment to helping us achieve our goals. We especially look forward to continued collaboration with our many valued KAM colleagues who will join the Blue Owl team at the close of this transaction.”
A supplemental investor presentation with respect to the transaction is available on the shareholders section of Blue Owl’s website at www.blueowl.com.
Ardea Partners LP and PJT Partners LP are serving as lead financial advisors to Blue Owl in connection with the transactions. BofA Securities, BMO Capital Markets Corp., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, Mizuho and its affiliate Greenhill & Co , Morgan Stanley & Co. LLC, and Truist Securities, Inc. are also acting as co-financial advisors to Blue Owl. Kirkland & Ellis LLP acted as legal advisor to Blue Owl.
J.P. Morgan Securities LLC is acting as lead financial advisor to KAM, and as co-placement agent on the investment in Kuvare. RBC is acting as financial advisor to Kuvare and as co-placement agent on the investment in Kuvare. Sidley Austin LLP acted as legal advisor to Kuvare.
About Blue Owl
Blue Owl (NYSE: OWL) is a leading asset manager that is redefining alternatives.
With over $165 billion in assets under management as of December 31, 2023, we invest across three multi-strategy platforms: Credit, GP Strategic Capital, and Real Estate. Anchored by a strong permanent capital base, we provide businesses with private capital solutions to drive long-term growth and offer institutional and individual investors differentiated alternative investment opportunities that aim to deliver strong performance, risk-adjusted returns, and capital preservation.
Together with over 685 experienced professionals globally, Blue Owl brings the vision and discipline to create the exceptional. To learn more, visit www.blueowl.com.
About Kuvare Holdings
Kuvare is a technology-enabled financial services platform providing life insurance and annuity products to consumers, reinsurance solutions to institutional markets, advisory services to insurance businesses, as well as asset management solutions. Headquartered in the Chicago area, and founded in 2015, Kuvare has $37 billion of assets and is committed to a sustainable long-term growth strategy. The family of Kuvare companies includes Lincoln Benefit Life Company, Guaranty Income Life Insurance Company, United Life Insurance Company, and Kuvare Life Re (Bermuda), and Ignite Partners. For more information about Kuvare, please visit https://kuvare.com.
Forward Looking Statements
Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “would,” “should,” “future,” “propose,” “target,” “goal,” “objective,” “outlook” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. Any such forward-looking statements are made pursuant to the safe harbor provisions available under applicable securities laws and speak only as of the date made. Blue Owl assumes no obligation to update or revise any such forward-looking statements except as required by law.
These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside Blue Owl’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.
Important factors, among others, that may affect actual results or outcomes include the risk of the KAM acquisition not closing on a timely basis, if at all; the inability to recognize the anticipated benefits of strategic acquisitions; costs related to acquisitions; the inability to maintain the listing of Blue Owl’s shares on the New York Stock Exchange; Blue Owl’s ability to manage growth; Blue Owl’s ability to execute its business plan and meet its projections; potential litigation involving Blue Owl; changes in applicable laws or regulations; and the possibility that Blue Owl may be adversely affected by other economic, business, geo-political and competitive factors.
Blue Owl Investor Contact
Ann Dai
Head of Investor Relations
blueowlir@blueowl.com
Blue Owl Media Contact
Nick Theccanat
Principal, Corporate Communications & Government Affairs
Nick.Theccanat@blueowl.com
Kuvare Media Contact
Erica Davis
Director, Corporate Communications
media@kuvare.com
800-637-6318
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