Willkie advised Oak Street in the transaction.
On October 18, it was announced that Oak Street Real Estate Capital and its investment advisory business had entered into a definitive merger agreement to be acquired by Blue Owl Capital Inc. (NYSE: OWL). The $950 million closing purchase price for the transaction 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). An additional $650 million in aggregate earnout consideration is payable to Oak Street equity holders upon the achievement of certain performance thresholds by the post-closing Oak Street business. The transaction is expected to close in the fourth quarter of 2021 and is subject to customary closing conditions.
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.
The transaction is expected to add real estate related financing solutions that are complementary to Blue Owl’s existing Direct Lending and GP solutions capabilities. Upon the closing of the transaction, key members of the Oak Street leadership team will remain in place leading the Oak Street business, and Oak Street's Chicago office will become an additional office for Blue Owl. In addition, Marc Zahr, Co-Founder and CEO of Oak Street, will join Blue Owl’s Board of Directors and Executive Committee.
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 firm had approximately $62.4 billion of assets under management as of June 30, 2021.
Oak Street Real Estate Capital is a diversified real estate investment firm. Oak Street offers a unique platform combining direct and indirect real estate strategies across two lines of business, its Net Lease platform and its Seeding and Strategic Capital platform. Oak Street specializes in providing flexible capital solutions to a variety of organizations including corporations, healthcare systems, universities and government entities.
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.