Blue Owl Capital’s Acquisition of Oak Street Real Estate Capital

Kirkland & Ellis represented Blue Owl, while Willkie Farr & Gallagher represented Oak Street in the transaction.

Blue Owl Capital Inc. (“Blue Owl”) (NYSE: OWL) closed its definitive merger agreement to acquire Oak Street Real Estate Capital, LLC (“Oak Street”), a Chicago-based real estate focused alternative asset management firm with over $10 billion in assets under management, as of June 30, 2021. The transaction is expected to close in the fourth quarter of 2021 and is subject to customary closing conditions. 

The closing purchase price of $950 million will be funded through a combination of cash and Blue Owl common units (up to an aggregate of approximately 39 million Blue Owl common units issuable at closing). In addition, upon the achievement of certain performance thresholds, Oak Street equity holders will be entitled to earnouts up to a total of approximately $650 million, payable in cash at future dates or in Blue Owl common units (up to an aggregate of approximately 39 million Blue Owl common units subject to vesting). The transaction is anticipated to be approximately 5- 7% accretive to Distributable Earnings per Share starting in 2022.

Oak Street is a Chicago-based firm, founded in 2009 with over 35 employees and with $10.8 billion of assets under management as of June 30, 2021. The firm focuses on two primary strategies: structuring sale-leasebacks, which includes triple net leases, as well as providing seed and strategic capital.

Blue Owl is an alternative asset manager that provides investors access to Direct Lending and GP Capital Solutions strategies through a variety of products. The firm’s breadth of offerings and permanent capital base enables it to offer a differentiated, holistic platform of capital solutions to participants throughout the private market ecosystem, including alternative asset managers and private middle market corporations. 

The Kirkland team was led by corporate partners Rick Campbell (Picture), Brad Friedman and Christopher Gandia, capital markets partner Pippa Bond and corporate associate Steven Choi.

Partners Michael Piazza and Jesse Myers led the Willkie deal team with assistance from counsel Julian Golay and associates Will Thanheiser, Chris Truman and Christopher Phares.

Involved fees earner: Philippa Bond – Kirkland & Ellis; Richard Campbell – Kirkland & Ellis; Steven Choi – Kirkland & Ellis; Bradley Friedman – Kirkland & Ellis; Christopher Gandia – Kirkland & Ellis; Michael De Voe Piazza – Willkie Farr & Gallagher; Julian Golay – Willkie Farr & Gallagher; Jesse Myers – Willkie Farr & Gallagher; Christopher Phares – Willkie Farr & Gallagher; Will Thanheiser – Willkie Farr & Gallagher; Christian Truman – Willkie Farr & Gallagher;

Law Firms: Kirkland & Ellis; Willkie Farr & Gallagher;

Clients: Blue Owl Capital; Oak Street Real Estate Capital;