TPG is acquiring Angelo Gordon in a cash and equity transaction valued at approximately $2.7 billion, according to an announcement on Monday by the two private equity firms.
The two companies have agreed to a deal which will expand TPG’s business in real estate and debt financing with the firm led by chief executive Jon Winkelried explaining taking on Angelo Gordon’s 650 employees across 12 offices in the US, Europe, and Asia as a way to rapidly grow its business.
“This strategic transaction meaningfully expands our investing capabilities and broadens our product offering. The addition of Angelo Gordon also underscores our continued focus on growing and scaling through diversification, while driving long-term value for our shareholders,” Winkelried said in a statement.
As of 31 December, the two firms had a combined AUM of $208 billion and following completion of the deal, TPG will manage assets across a broadly diversified set of investment strategies, including private equity, impact, credit, real estate, and market solutions.
Cash and Shares
The $2.7 billion deal price is based on TPG’s share price as of May 12, 2023, and includes an estimated $970 million in cash and up to 62.5 million common units of the TPG Operating Group and restricted stock units of TPG, with these numbers subject to adjustments, according to the statement.
The transaction also includes an earnout, valued at up to $400 million, based on Angelo Gordon’s future financial performance.
TPG said the agreement followed over a year of discussions between the leadership teams of both organisations, and highlighted the value of acquiring Angelo Gordon’s credit and real estate strategies.
“We are proud to be joining a world-class investment platform that shares our philosophy on firm culture, investment excellence, and delivering for clients,” said Adam Schwartz, co-CEO and head of real estate at Angelo Gordon. “This transaction is a testament to the team and business that we have built over nearly 35 years, and we are excited about the new and expanded opportunities ahead for our employees and LPs.”
Angelo Gordon’s real estate platform manages $18 billion in dedicated value-add real estate strategies spanning the US, Europe, and Asia, as well as a net lease strategy, with the company having doubling its AUM over the past five years.