BY Fraser Tennant
In a major transaction within the US lending sector, the Canada Pension Plan Investment Board (CPPIB) has agreed to acquire 100 percent of Antares Capital - the sponsor lending portfolio of GE Capital - in a deal worth in the region of $12bn.
The move to acquire Chicago-based Antares Capital, the leading lender to middle market private equity sponsors in the US (provider of more than $123bn in financing over the last five years), is being seen as a highly strategic, long-term platform investment for CPPIB Principal Credit Investments (PCI) group.
With a focus on providing financing solutions both globally and across the capital structure, CPPIB’s PCI group makes direct primary and secondary investments in leveraged loans, high yield bonds, mezzanine, intellectual property and other solutions.
“This acquisition exemplifies our strategy to achieve scale in key sectors through platform investments," explained Mark Wiseman, president & CEO of CPPIB. “It secures a market-leading business that is exceptionally well positioned to deliver value-building investment flows. In doing so, we are advancing the prudent diversification of our investment portfolio, strengthening the Fund even further.”
Upon the closure of the transaction, Antares Capital will operate as a standalone, independent business governed by its own board of directors, effectively retaining the brand that has built up a long and impressive track record in the US middle market lending sector.
“We are excited to partner with CPPIB," said delighted David Brackett, a managing partner at Antares Capital. “We couldn't imagine a better outcome to the sale process for our team or our customers. CPPIB brings deep understanding and knowledge of our market and permanent capital, which will allow us to serve our customers in both good and challenging times.”
The acquisition of Antares Capital, along with the retention of its managing partners, David Brackett and John Martin, will expand and complement CPPIB’s existing Principal Credit Investments portfolio, according to Mark Jenkins, senior managing director & global head of private investments at CPPIB. He said: “With this single transaction, we immediately acquire turn-key scale and a long-term partnership with the best, most experienced management team in the market.”
The Antares Capital transaction, subject to the customary regulatory approvals and closing conditions, is expected to complete during the third quarter of 2015.