Ares Management Corp 8-K, filed May 20, 2021
Ares Management Corp (ARES)
8-K
2021-05-20
For: 2021-05-20
View Original
Added on
April 12, 2026
About this 8-K
Ares Management Corp filed this 8-K on May 20, 2021.
Items reported
- Item 3.02: Unregistered sale of equity
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
______________________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) May 20, 2021
(Exact Name of Registrant as Specified in Charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive office) (Zip Code)
(310 ) 201-4100
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
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Item 3.02 Unregistered Sale of Equity Securities.
On May 20, 2021, Ares Management Corporation (“Ares” or the “Company”) agreed that in connection with the Transaction (as defined below), Ares Holdings L.P. (“Buyer”), a subsidiary of Ares, will deliver up to an aggregate of approximately 3,496,353 operating group units of Buyer (“OGUs”), in addition to cash consideration, at the closing of the Transaction (the “Closing”), subject to certain adjustments. In addition, in connection with the Transaction, subject to the achievement of certain revenue milestones following the Closing (the “Earnout”), a subsidiary of the Company agreed to deliver up to $137.5 million of additional OGUs or shares of Class A common stock, based on a volume weighted average price per share of the Company’s Class A Common Stock at such time, in addition to cash consideration. Assuming a full exchange of all outstanding OGUs, excluding the Earnout, for shares of Class A common stock of the Company (together with the OGUs and the total number shares of Class A common stock and non-voting common stock of the Company outstanding as of May 19, 2021, “Total Equity”), the OGUs to be issued at the closing of the Transaction are expected to represent approximately 1% of the outstanding Total Equity as of May 19, 2021.
The OGUs will be issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended, in partial consideration for the sellers’ equity interests in Black Creek Group’s U.S. real estate investment advisory and distribution business (collectively with its subsidiaries, “Black Creek”).
Item 7.01 Regulation FD Disclosure.
On May 20, 2021, Buyer entered into a definitive agreement to acquire Black Creek (the “Transaction”). The agreement relating to the Transaction contains customary representations, warranties and agreements by the parties and termination provisions. The Transaction is subject to customary closing conditions, and is expected to close in the third quarter of 2021.
On May 20, 2021, the Company issued a press release announcing the Transaction. The text of the press release is included as Exhibit 99.1 to this Form 8-K.
On May 20, 2021, Ares issued an investor presentation discussing the Transaction. Among other things, the investor presentation discloses that inclusive of the Landmark Partners, LLC and Black Creek acquisitions, Ares expects its fee related earnings and its dividends per share of Class A common stock to increase 20% or more per year in the coming years. The materials used in connection with such presentation have been posted on the Company’s website under the heading “Investor Resources-Events and Presentations - Ares Management Agrees to Acquire Black Creek Group,” posted May 20, 2021 http://www.ares-ir.com/news-events-presentations/events-and-presentations/default.aspx. The information disclosed under this Item 7.01, including Exhibit 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be deemed incorporated by reference into any filing made under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
The disclosure set forth in the first paragraph of Item 7.01 of this Form 8-K is incorporated by reference into this Item 8.01.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of the federal securities laws. You can identify these statements by the use of the words “assumes,” “believes,” “estimates,” “expects,” “guidance,” “intends,” “plans,” “projects,” and similar expressions that do not relate to historical matters. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including the Company’s ability to consummate the acquisition of Black Creek by a wholly-owned subsidiary of the Company and to effectively integrate the acquired business into the Company’s operations to achieve the expected benefits therefrom. You should exercise caution in interpreting and relying on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors which are, in some cases, beyond the Company’s control and could materially affect actual results, performance, or achievements. For a further description of such factors, you should read the Company’s filings with the Securities and Exchange Commission. The Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
| Exhibit Number | Description | |||||||
Press Release of Ares Management Corporation, dated May 20, 2021 | ||||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ARES MANAGEMENT CORPORATION | |||||||||||
| Dated: May 20, 2021 | |||||||||||
| By: | /s/ Naseem Sagati Aghili | ||||||||||
| Name: | Naseem Sagati Aghili | ||||||||||
| Title: | General Counsel and Secretary | ||||||||||
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Exhibit 99.1
Ares Management Corporation Announces Agreement to Acquire Black Creek Group
Leading Core / Core-Plus Real Estate Firm Will Expand Ares’ Real Estate Group with Complementary Capabilities and Vertically Integrated Platform in High Conviction Industrial Sector
Business Combination Will Add Significant Perpetual, Non-Traded REIT Capital and Retail Distribution Platform with Capacity to Scale Existing and New Products
Combined Real Estate Group Assets Under Management to Increase to Approximately $29 Billion
LOS ANGELES—May 20, 2021—Ares Management Corporation (“Ares”) (NYSE: ARES) announced today that a subsidiary of Ares has entered into a definitive agreement to acquire 100% of Black Creek Group’s U.S. real estate investment advisory and distribution business (“Black Creek”), a leading real estate investment management firm.
Founded in 1993, Black Creek had approximately $11.6 billion of assets under management, as of March 31, 2021, in core / core-plus real estate strategies across two non-traded Real Estate Investment Trusts (“REITs”) and various institutional fund vehicles. Black Creek’s senior management team has an average of 25 years of experience in sourcing, acquiring, operating and developing properties in the U.S. Supported by large institutional investors and an established retail investor base, Black Creek has a longstanding track record across major property types, including industrial, multifamily, office and retail. Black Creek’s vertically integrated platform brings significant local expertise with over 100 investment professionals operating across eight offices throughout the U.S.
With an experienced team focused on core / core-plus strategies, the transaction is expected to broaden the existing capabilities and product offerings of the Ares Real Estate Group. Additionally, the acquisition of Black Creek will expand the Ares real estate platform with vehicles that complement Ares’ existing real estate debt and U.S. and European value-add and opportunistic funds. Black Creek has operated in the high conviction industrial sector for more than 25 years, which is expected to increase the Ares Real Estate Group’s breadth in the sector and further drive operating, sourcing and informational advantages for its fund investors. Ares believes the approximately $2 trillion industrial real estate sector exhibits consistent fundamentals across diverse market cycles and is positioned to benefit from heightened institutional interest driven in part by secular tailwinds and the accelerated growth of e-commerce.
The acquisition will also transform Ares’ retail distribution capability and increase Ares’ perpetual, non-traded REIT capital by $5.1 billion with the addition of two separate non-traded REITs. As one of the leading retail fundraising platforms for non-traded REITs, Black Creek’s over 80-person broker dealer team distributes and markets to more than 70 relationships that have access to over 100,000 financial advisors. Over time, it is expected that through this combination there will be attractive growth prospects for Black Creek’s non-traded REITs and enhanced opportunities to accelerate retail distribution for Ares’ various alternative asset products to broker dealers through Black Creek’s distribution platform.
“We are very pleased to enter into this strategic transaction with Black Creek, which further scales our real estate business, expands us into core / core-plus strategies and provides us with a leading non-traded REIT retail distribution platform,” said Michael Arougheti, Chief Executive Officer and President of Ares. “We believe that this highly complementary combination will add meaningful revenue synergies for our real estate business as we offer new products to our existing investor base.”
“This acquisition presents an attractive opportunity to further enhance our team’s capabilities and grow our leading global real estate equity and debt business to approximately $29 billion in assets under management with offices spanning across the U.S. and Europe,” said Bill Benjamin, Partner and Head of the Ares Real Estate Group. “We are very excited to partner with senior management at Black Creek to offer new strategies, expand our sourcing networks and bolster execution. We have known and respected the team at Black Creek for many years and we believe there is a strong cultural alignment, which positions us for long-term success of our combined businesses.”
“We are excited to join the Ares team and we believe this is a highly complementary combination of people, investment products and resources,” said Raj Dhanda, Chief Executive Officer at Black Creek Group. “As a leading firm with extensive global relationships and a collaborative culture, Ares was the ideal partner for Black Creek Group and this agreement will allow the combined Ares Real Estate Group to expand our capabilities, reach and growth potential. We are excited for our leadership teams to work together and capitalize on what we believe will be a promising future.”
Upon closing, key members of the Black Creek leadership team will remain in place and become part of the Ares Real Estate Group, which is led by Bill Benjamin. The transaction consideration will include an upfront amount comprised of a combination of cash and Ares Operating Group Units in addition to a potential performance-based earnout payable in a combination of cash and Ares equity. The transaction is expected to be accretive to Ares’ after-tax fee related earnings per share of Class A common stock and after-tax realized income per share of Class A common stock in the first year and a more meaningful driver of growth in earnings in the years ahead. The transaction is expected to close early in the third quarter of 2021 and is subject to customary closing conditions, including regulatory approvals.
Eastdil Secured, LLC acted as financial advisor to Ares and Latham & Watkins LLP served as legal counsel. Hodes Weill & Associates acted as financial advisor to Black Creek and Simpson Thacher & Bartlett LLP served as legal counsel.
A supplemental investor presentation on the transaction is available on the Investor Resources section of Ares’ website at www.aresmgmt.com.
About Ares Management Corporation
Ares Management Corporation is a leading global alternative investment manager operating integrated groups across Credit, Private Equity, Real Estate and Strategic Initiatives. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of March 31, 2021, Ares Management's global platform had approximately $207 billion of assets under management with more than 1,450 employees operating across North America, Europe, Asia Pacific and the Middle East. For more information, please visit www.aresmgmt.com.
About Black Creek Group
Black Creek Group is a leading real estate investment management firm that invests in institutional quality commercial real estate across the U.S. The firm manages diverse offerings across the industrial, multifamily, office and retail sectors and provides a range of investment solutions for both institutional and wealth management channels. Over its more than 25-year history, the firm has bought or built over $23 billion of investments. As of March 31, 2021, the firm had a national footprint of 75.8 million square feet across 31 U.S. markets, including properties under control and development. Learn more at blackcreekgroup.com.
Forward-Looking Statements
Statements included herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or our future performance or financial condition. These statements are not guarantees of future performance, condition or results and involve a number of risks and uncertainties, including the ability of Ares to consummate the Black Creek acquisition and to effectively integrate the acquired business into our operations and to achieve the expected benefit therefrom. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission. Ares Management Corporation undertakes no duty to update any forward-looking statements made herein.
Contacts:
Ares Management Corporation
Media:
U.S. and International
Brunswick Group
Jonathan Doorley / Alex Yankus
212-333-3810
ares@brunswickgroup.com
or
Ares Management
Brittany Cash, 212-301-0347
bcash@aresmgmt.com
Investors:
Ares Management Corporation
Carl Drake, 888-818-5298
cdrake@aresmgmt.com
or
Greg Mason, 314-282-2533
gmason@aresmgmt.com
Black Creek Group
Briana Ochiltree, 720-728-3109
briana.ochiltree@blackcreekgroup.com