BlackRock Buys Credit Firm HPS Investment Partners for $12 Billion
After a period of speculation where a purchase was rumored, BlackRock (NYSE: BLK) announced that it will acquire HPS Investment Partners in an all-stock deal valued at approximately $12 billion. HPS is a New York-based private credit manager overseeing approximately $148 billion in client assets.
HPS, which sponsors non-listed business development company HPS Corporate Lending Fund, provides customized financing solutions to businesses, including high-yield loans and asset-based finance.
BlackRock, the world’s largest asset manager with $11.5 trillion in assets, stated that the deal will integrate HPS’ operations with BlackRock’s existing private credit division, creating a private credit franchise managing approximately $220 billion in assets. Following the transaction, BlackRock will have almost $600 billion in alternative assets.
The new division will be led by HPS founders Scott Kapnick, Scot French, and Michael Patterson.
“I am excited by what HPS and BlackRock can do together for our clients and look forward to welcoming [Scott, Scot, and Michael], along with the entire HPS team, to BlackRock. We have always sought to position ourselves ahead of our clients’ needs. Together with the scale, capabilities and expertise of the HPS team, BlackRock will deliver clients solutions that seamlessly blend public and private,” said Laurence D. Fink, chairman and chief executive officer of BlackRock.
BlackRock stated that a portion of the deal will be paid at closing, and approximately 25% will be paid in five years. The deal also includes about $675 million in a retention package for HPS employees. The company also stated that it plans to retire for cash, or refinance, approximately $400 million of existing HPS debt.
The deal, which is expected to close in mid-2025 pending regulatory approval, is also expected to raise BlackRock’s private market assets under management by 40% and its management fees by about 35%.
Click here to visit The DI Wire directory page.
