NEW YORK - Blue Owl Capital Corporation (NYSE: OBDC) and Blue Owl Capital Corporation III (NYSE: OBDE) announced today that their respective shareholders have approved all proposals concerning their upcoming merger. The affirmative votes were resounding, with over 97% of OBDC and nearly 100% of OBDE votes cast in favor. Their parent company, Blue Owl Capital Inc. (NYSE: OWL), has shown remarkable performance with a 57% return over the past year and maintains a "GREAT" financial health score according to InvestingPro analysis.
The merger, slated to finalize around January 13, 2025, will combine the two specialty finance companies, both of which focus on lending to U.S. middle-market companies. Craig W. Packer, CEO of both OBDC and OBDE, expressed gratitude to the shareholders for their strong support, highlighting the merger's potential to create a more diversified and robust business development company (BDC) with enhanced credit quality. Blue Owl Capital has demonstrated strong financial fundamentals, with revenue growing 32% year-over-year and maintaining a healthy current ratio of 1.96.
In anticipation of the merger's completion, OBDE will distribute a special dividend of $0.52 per share and a quarterly dividend of $0.35 per share on the following days: January 9 and January 10, 2025, respectively. These dividends will be paid to shareholders recorded as of December 31, 2024. The special dividend corresponds to OBDE's estimated undistributed taxable income by the merger's close.
OBDC and OBDE, both regulated as BDCs under the Investment Company Act of 1940, are managed by SEC-registered investment advisers affiliated with Blue Owl Capital Inc. (NYSE: OWL). As of September 30, 2024, OBDC and OBDE had investments in 219 and 185 portfolio companies, valued at $13.4 billion and $4.2 billion, respectively.
The press release also contained forward-looking statements regarding the expected benefits and outcomes of the merger, including projected operating results and investment impacts. However, these statements are subject to various risks and uncertainties that could cause actual results to differ materially.
This news is based on a press release statement from Blue Owl Capital Corporation. The merger is subject to customary closing conditions, and further details can be found in the relevant SEC filings made by both OBDC and OBDE. For investors seeking deeper insights into Blue Owl Capital's financial health and growth prospects, InvestingPro offers comprehensive analysis including 8 additional ProTips and detailed valuation metrics through their Pro Research Report, available for over 1,400 US stocks.
In other recent news, Blue Owl Capital has experienced significant developments. Goldman Sachs (NYSE:GS) downgraded Blue Owl Capital's stock from Buy to Neutral, setting a new price target of $24.75, citing anticipated slowdown in its credit business' compound annual growth rate and increasing competition. The company's revenue growth has been impressive, with a 32.15% increase in the last twelve months. However, the firm's analysts project earnings per share to fall roughly 6% below consensus estimates for the years 2025 to 2027.
Blue Owl Capital has been considering mergers of several portfolio firms to create a major industry player, a move reflective of ongoing consolidation in the alternative investment market. On the other hand, Piper Sandler raised the price target for Blue Owl Capital to $25, reflecting confidence in the company's long-term growth, particularly its forecasted fee-related earnings growth of over 25%.
In its recent third-quarter 2024 earnings report, Blue Owl Capital announced substantial increases in management fees and earnings, with fee-related earnings of $0.22 per share and distributable earnings of $0.20 per share. The company also declared a dividend of $0.18 per share. Blue Owl Capital raised $7.9 billion in equity capital in Q3 2024, with $4.2 billion coming from private wealth. The company has revealed plans for product expansion, focusing on digital infrastructure and alternative credit.
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