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Kirkland & Ellis LLP-advised private-equity shop Blue Owl Capital Inc. on Tuesday unveiled plans to buy alternative credit manager Atalaya Capital Management LP, led by Cravath Swaine & Moore LLP, for up to $800 million. This acquisition continues a trend seen earlier in the year of private-equity firms merging with or acquiring other asset managers.

Blue Owl Buys Atalaya Capital : Transaction Details

The purchase price for the transaction is $450 million, including $350 million of Blue Owl equity and $100 million in cash. There is also the potential for up to an additional $350 million of earnout consideration in the form of equity, subject to the achievement of future revenue targets, according to a statement.

About Atalaya Capital

Based in New York, Atalaya focuses mainly on asset-based credit investments across consumer and commercial finance, corporate, and real assets. The firm has over $10 billion of assets under management as of June 30 and has deployed more than $17 billion of capital since its 2006 inception.

"The acquisition of Atalaya adds adjacent and scaled alternative credit capabilities that complement Blue Owl's leading position in direct lending," said Doug Ostrover and Marc Lipschultz, co-CEOs of Blue Owl, in the statement. "Atalaya significantly expands Blue Owl's alternative credit offerings and delivers a more robust suite of financing solutions to our stakeholders."

Blue Owl Buys Atalaya Capital :Leadership Changes

Atalaya was founded by Ivan Zinn, who will join Blue Owl as head of alternative credit following the close of the transaction. The New York-based firm has roughly 115 employees, most of whom are expected to join Blue Owl and continue to manage existing Atalaya funds.

"We view Blue Owl as an ideal strategic partner to support the next stage of our growth," Zinn said in the statement. "We are proud of the exceptional track record we built over nearly two decades and are incredibly grateful to our investors, team, and partners who made this journey possible. We look forward to continuing to drive forward at the leading edge of alternative credit as part of Blue Owl."

Closing Conditions and Future Outlook

The deal is expected to close in the second half of the year, subject to customary closing conditions. It is anticipated to be mostly accretive to Blue Owl in 2025, according to the statement.

Blue Owl's acquisition of Atalaya continues the trend of mergers and acquisitions activity between private-equity firms and asset managers as they strive to diversify their offerings to compete for limited partner dollars. Blue Owl is no stranger to the trend, unveiling plans in April to buy Kuvare Asset Management for up to $1 billion in a cash and stock transaction.

Blue Owl Buys Atalaya Capital : Legal Counsel

The Cravath partners team advising Atalaya was led by Mark I. Greene, Aaron M. Gruber, and Andrew M. Wark on M&A matters; J. Leonard Teti II and Andrew T. Davis on tax matters; Eric W. Hilfers on executive compensation and benefits matters; and Jesse M. Weiss on antitrust matters. Full legal counsel information for the Kirkland team advising Blue Owl was not immediately available Tuesday.