T. Rowe Price Group Inc. is buying Oak Hill Advisors for up to about US$4.2 billion with $3.3 billion payable at closing.
The global investment management organization is buying the alternative credit manager with about 74 per cent in cash and 26 per cent in T. Rowe Price common stock and up to an additional $900 million in cash upon the achievement of certain business milestones beginning in 2025.
“While we are committed to our long-term strategy to grow our business organically, we have also taken a deliberate and thoughtful approach to considering adding new capabilities through acquisitions that advance our business strategy,” said Bill Stromberg, chair of T. Rowe Price’s board of directors and chief executive officer, in a press release. “OHA meets the high bar we have set for inorganic opportunities and their proven private credit expertise will help us meet our clients’ demand for alternative credit.”
Meanwhile, Franklin Templeton is buying Lexington Partners for aggregate cash payments of $1.75 billion, made up of $1 billion at close and additional payments totalling $750 million over the next three years.
The acquisition of the global manager of secondary private equity and co-investment funds will “bolster Franklin Templeton’s alternative asset capabilities,” according to a press release.
“This acquisition will position us to capitalize on the highly sought after secondary private equity market, an area of growth that complements Franklin Templeton’s existing alternative asset capabilities to meet the growing appetite of our clients for alternative asset management around the globe,” said Jenny Johnson, president and CEO of Franklin Templeton, in the release.