TPG to Acquire Angelo Gordon in a Bid for Private Credit
Posted on 05/15/2023
TPG Inc. (NASDAQ: TPG) inked a deal to acquire Angelo Gordon, a US$ 73 billion alternative investment firm focused on credit and real estate investing. TPG will acquire Angelo Gordon in a cash and equity transaction valued at approximately US$ 2.7 billion, based on TPG Inc.’s share price as of May 12, 2023, including an estimated US$ 970 million in cash and up to 62.5 million common units of the TPG Operating Group and restricted stock units of TPG, in each case, subject to certain adjustments. The transaction also includes an earnout based on Angelo Gordon’s future financial performance, valued at up to US$ 400 million.
Angelo Gordon is a platform with more than 650 employees across 12 offices in the U.S., Europe, and Asia. Angelo Gordon & Company was founded in November 1988 by John M. Angelo and Michael L. Gordon who together ran the arbitrage department of L.F. Rothschild in the 1980s.
Angelo Gordon’s US$ 55 billion credit platform offers scaled and diversified capabilities across the credit investing spectrum, including corporate credit, direct lending, and structured credit, and its US$ 18 billion real estate platform manages dedicated value-add real estate strategies with significant reach in the U.S., Europe, and Asia, as well as a net lease strategy.
Upon the close of the transaction, TPG will manage assets across a broadly diversified set of investment strategies, including private equity, impact, credit, real estate, and market solutions.
Key Transaction Details
The cash portion of the transaction will be funded from TPG’s current cash balance and undrawn revolver, and is expected to be mid-to-high single digit accretive to TPG shareholders on an FRE and After-tax DE per share basis in 2024, before any revenue or cost synergies.
Upon closing of the transaction, Angelo Gordon will become a new significant investing platform within TPG. Angelo Gordon’s Co-CEOs Josh Baumgarten and Adam Schwartz will become Co-Managing Partners of the platform, reporting to TPG CEO, Jon Winkelried.
Approvals and Closing
The transaction is subject to customary closing conditions, including HSR, international regulatory approvals, and other client and third-party consents. The transaction, which was unanimously approved by the TPG Board of Directors, is expected to close in Q4 2023.
Advisors
Ardea Partners LP acted as lead financial advisor to TPG and provided a fairness opinion to TPG’s Board of Directors. J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC also acted as financial advisors to TPG. Weil, Gotshal & Manges LLP served as TPG’s lead transaction counsel. Davis Polk & Wardwell LLP, Shearman & Sterling LLP, and Cleary Gottlieb Steen & Hamilton LLP advised TPG with respect to tax, executive compensation, and investment fund matters, respectively. Goldman, Sachs & Co. LLC and Piper Sandler acted as financial advisor to Angelo Gordon and Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel.
Shearman & Sterling advised TPG Inc. on the executive compensation and employment aspects and related governance considerations of its announced acquisition of Angelo Gordon.
Keywords: TPG Capital, Angelo, Gordon & Co.