An affiliate of alternative investment platform FAB Partners is to acquire US private debt investment manager CIFC for approximately USD333 million in cash.
Under the terms of the merger agreement, CIFC shareholders will be entitled to receive USD11.46 in cash per share – USD11.36 per share as consideration in the merger, plus a USD0.10 per share distribution detailed below.
This represents a premium of more than 60 per cent over CIFC's closing share price on 19 August and a premium of approximately 160 per cent over the 27 January 2016 closing share price, the day prior to CIFC's announcement of its pursuit of strategic alternatives to accelerate the growth of its business.
The CIFC board has declared a cash distribution of USD0.10 per share to be paid on 12 September to shareholders of record as of the close of business on 31 August 2016.
Founded in 2005 and based in New York, CIFC is a USD14 billion private debt manager specialising in US corporate loan strategies. CIFC has over 75 employees, including more than 30 dedicated investment professionals. The firm serves more than 200 institutional investors globally and is one of the largest managers of collateralised loan obligations (CLOs) in North America.
FAB is a global alternative investment platform that focuses on originating, structuring and actively managing investments across geographies and asset classes. FAB was founded by Michele Faissola, Dalinc Ariburnu and Nizar Al-Bassam, each of whom has significant capital markets and investment management experience.
Jeffrey S Serota, chairman of CIFC's board, says: "We are pleased to have reached this agreement with FAB, which follows a thorough review of strategic and financial alternatives that generated interest from over a dozen suitors. Our board concluded that this offer maximises value for our shareholders and is in the best interests of our investors and clients."
Stephen Vaccaro, co-president and chief investment officer of CIFC, adds: "We have spent the past 10 years building a robust and scalable US private debt business. With the support of FAB, our company embarks on a new chapter of growth and product line expansion. We are thrilled to be able to tap into the extensive experience FAB can contribute to our platform and regard FAB as ideally positioned to help CIFC serve its clients, broaden its product offerings and achieve new milestones."
"CIFC is a leading private debt investment platform and one of the largest CLO managers in the industry and we are thrilled that this acquisition marks our first foray into the US credit markets," says Faissola. "CIFC's highly experienced investment team, institutional infrastructure and blue-chip client base, make them an ideal partner for us as we look to access the US market for our clients. Our clients are committed to capitalising on both current and future investment opportunities in the US and we view CIFC as our beachhead into these exciting opportunities."
FAB has secured the capital backing for the acquisition of CIFC from Supreme Universal Holdings, a company controlled by Qatar's royal family.
The transaction has been approved by CIFC's board of directors. Columbus Nova, CIFC's majority shareholder, has agreed to vote its shares in favour of the transaction.
The transaction, which is subject to approval by CIFC's shareholders, the satisfaction of certain regulatory approvals and other customary closing conditions, is expected to close this calendar year.
JP Morgan Securities is serving as exclusive financial adviser to CIFC and Dechert and Latham & Watkins are serving as legal counsel. Moelis & Company is acting as exclusive financial adviser to FAB, and Weil, Gotshal & Manges and Ernst & Young are serving as legal adviser and accounting and tax adviser, respectively.
