Equitable Holdings Subsidiary AllianceBernstein to Acquire Global Private Alternatives Manager CarVal Investors
17 März 2022 - 11:47AM
Business Wire
Equitable Holdings, Inc. (the “Company”) (NYSE: EQH) announced
today that one of its subsidiaries, AllianceBernstein (NYSE: AB),
has entered into an agreement to acquire CarVal Investors L.P.
(“CarVal”).
CarVal is an established global private alternatives investment
manager with $14.3 billion in AUM1, primarily focused on
opportunistic and distressed credit, renewable energy
infrastructure, specialty finance and transportation
investments.
The acquisition of CarVal further enhances Equitable Holding’s
differentiated business model, which pairs retirement, asset
management and affiliated advice. This transaction expands AB’s
higher-multiple private markets platform to nearly $50bn in AUM2
and elevates AB into a leading private credit provider with direct
origination capabilities. Additionally, the Company expects to
generate synergies following the acquisition. Equitable will
allocate $750 million of General Account assets into CarVal
strategies to improve risk adjusted returns to policyholders and
CarVal will have access to AB’s global distribution platform.
“Even through periods of market volatility, the strength of our
business model and balance sheet gives us the flexibility to
execute on our strategy to grow our capital-light businesses and
generate returns for both our clients and shareholders,” said Mark
Pearson, CEO and President of Equitable Holdings. “The transaction
strengthens our business model by further enhancing the profile of
our leading asset manager and increases long-term growth, all while
maintaining $1.5 billion of cashflows.”
The details of the transaction are as follows:
- AB has announced a definitive agreement to purchase 100% of
CarVal for an upfront purchase price of $750 million and a
multi-year earnout if certain targets are reached.
- The deal will be funded primarily through the issuance of AB
units.
- This efficient deal structure has no impact to EQH capital
position or cash flows as higher fee revenue from CarVal offsets
the change in EQH’s ownership in AB from 65% to c.62%, with the
potential to reach c.60% if the full earnout is paid upon certain
targets being reached.
- The deal is neutral to EQH EPS in the short term and accretive
thereafter.
- The acquisition is part of the Company’s previously announced
strategy to drive increased returns while growing AB’s private
markets business through a $10 billion capital commitment, by
allocating $750 million of General Account assets to CarVal
strategies.
Additionally, the Company’s strong capital position, year-end
cash of $1.6 billion at Holdings and the deal structure, which
includes a significant portion to be paid through an earnout
structure, gives the Company confidence in the transaction in the
current market environment. Lastly, CarVal’s differentiated
capabilities in distressed credit will provide more opportunities
to generate excess returns.
At the transaction closing, expected to occur in the second
quarter of 2022, CarVal will become a wholly owned subsidiary of
AllianceBernstein L.P. and will be rebranded as AB CarVal
Investors. The transaction is subject to customary regulatory and
closing conditions. CarVal and its employees will continue to
operate from its Minneapolis, Minnesota headquarters and its office
locations around the world.
About Equitable Holdings
Equitable Holdings, Inc. (NYSE: EQH) is a financial services
holding company comprised of two complementary and well-established
principal franchises, Equitable and AllianceBernstein. Founded in
1859, Equitable provides advice, protection and retirement
strategies to individuals, families and small businesses.
AllianceBernstein is a global investment management firm that
offers high-quality research and diversified investment services to
institutional investors, individuals and private wealth clients in
major world markets. Equitable Holdings has approximately 12,200
employees and financial professionals, $908 billion in assets under
management (as of 12/31/2021) and more than 5 million client
relationships globally.
About AllianceBernstein
AllianceBernstein is a leading global investment management firm
that offers high-quality research and diversified investment
services to institutional investors, individuals, and private
wealth clients in major world markets. As of February 28, 2022,
AllianceBernstein had $739 billion in assets under management.
Additional information about AB may be found on our website,
www.alliancebernstein.com.
For more information on AllianceBernstein’s acquisition of
CarVal Investors, please visit AllianceBernstein’s Investor
Relations site.
1AUM of CarVal comprised of approximately $9.9 billion in
fee-earning AUM and $4.5 billion in fee-eligible AUM. As of
12/31/2021. 2Pro forma AUM of AB comprised of approximately $37.2
billion in fee-earning AUM and $12.0 billion in fee-eligible AUM.
Figures may not sum due to rounding. As of 12/31/2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220316006023/en/
Investor Relations Işıl Müderrisoğlu (212) 314-2476
IR@equitable.com Media Relations Todd Williamson (212)
314-2010 mediarelations@equitable.com
AllianceBernstein (NYSE:AB)
Historical Stock Chart
Von Mär 2024 bis Apr 2024
AllianceBernstein (NYSE:AB)
Historical Stock Chart
Von Apr 2023 bis Apr 2024