Blackstone Group acquires hedge fund GSO Capital Partners

Source: Exec Digital USA

Date :10/01/2008 04:01:17

Asset management firm Blackstone Group LP said Thursday it will acquire GSO Capital Partners LP for as much as $930 million and announces $500 million unit repurchase program.

Blackstone will pay $620 million up front in cash and stock and up to an additional $310 million over the next five years based on meeting certain earnings targets.

GSO, an alternative asset manager, specializing in leveraged finance, currently has about $10 billion under management. With the acquisition, Blackstone's alternative asset management business will have more than $21 billion under management.

Global investment

Blackstone said that the acquisition will augment its global alternative investment platform in the credit area, adding several new lines of business and creating significant synergies and opportunities.

“The deal will also give GSO the opportunity to enhance its investment platform by harnessing the competitive strengths and deal flow provided by Blackstone’s franchise,” Blackstone said in a statement.

Stephen A. Schwarzman, Chairman and Chief Executive Officer of Blackstone, said: “Given the current dislocation in the credit markets, this is an ideal time to create a more powerful, diversified platform from which to grow Blackstone’s business.”

The acquisition which is subject to a definitive purchase agreement is expected to close later in the first quarter.

Repurchase

Meanwhile Blackstone announced that the Board of Directors of its general partner, Blackstone Group Management L.L.C., has authorized the repurchase of up to $500 million of Blackstone units.

Under the repurchase program, units may be repurchased from time to time in open market transactions, in privately negotiated transactions or otherwise, the company said.

January 10, 2008