#United States #New York #Blue Owl #Merger #BDC

Blue Owl Capital Corporation Merges with Blue Owl Capital Corporation III

On January 13, 2025, Blue Owl Capital Corporation (NYSE: OBDC) proudly announced the completion of its merger with Blue Owl Capital Corporation III (OBDE). With OBDC as the surviving entity, this merger consolidates OBDC's position as the second largest externally-managed business development company (BDC) in public markets, boasting a remarkable $18.6 billion in total assets at fair value.

As of the end of September 2024, the newly combined company has made investments in a total of 232 portfolio companies. Craig W. Packer, Chief Executive Officer of OBDC, emphasized the significance of this merger, stating that it not only enhances the market presence of OBDC but also diversifies the portfolio while maintaining strong credit quality. He expressed gratitude to shareholders for their support throughout this transformative process and mentioned that the combined company's increased scale will improve risk-adjusted returns in various economic climates.

Under the terms of the merger, OBDE shareholders were offered 0.9779 shares of OBDC common stock for each share of OBDE common stock they held, alongside cash payments for any fractional shares. As a result, legacy shareholders of OBDC now account for approximately 76% of the combined entity, while former OBDE shareholders hold about 24%.

To facilitate the merger, OBDC's advisor, Blue Owl Credit Advisors LLC, committed to reimbursing $4.25 million in fees and expenses associated with this transaction. This substantial commitment reflects the advisor's dedication to ensuring a smooth integration and supporting growth initiatives post-merger.

Multiple financial institutions played pivotal roles in advising both companies during this merger. BofA Securities and Truist Securities, Inc. served as primary financial advisors for OBDC, while ING Financial Markets LLC and MUFG Bank, Ltd. partnered as co-financial advisors. For OBDE, Keefe, Bruyette & Woods acted as the lead financial advisor, and SMBC provided additional advisory support.

About Blue Owl Capital Corporation

Blue Owl Capital Corporation, trading as OBDC, operates as a specialty finance company focusing on lending to U.S. middle-market firms. Before the merger, OBDC had an impressive portfolio comprising 219 companies valued at a total fair value of $13.4 billion as of September 30, 2024. The firm has chosen to be regulated as a BDC under the Investment Company Act of 1940 and is externally managed by Blue Owl Credit Advisors LLC, an affiliate of Blue Owl Capital Inc. (NYSE: OWL).

Future Prospects

Looking towards the future, Blue Owl Capital Corporation is poised to leverage this merger to enhance its operational scale while navigating the complex landscape of financial markets. The emphasis is on generating long-term value for its shareholders through strategic investment portfolios while adapting to the dynamic macroeconomic conditions that affect financial stability and growth opportunities.

As Blue Owl Capital embarks on this new chapter post-merger, industry followers will be keenly observing how this consolidation influences its market positioning and overall performance in the competitive field of business development companies. Stakeholders can anticipate further developments as OBDC aims to provide attractive risk-adjusted returns and maximize shareholder value in unpredictable economic circumstances.