The transaction will be funded through a mix of $1.8 billion in cash and $3.7 billion in Ares shares. A long-term incentive plan for GLP’s leadership could see an additional payout of up to $1.5 billion by 2027, with Ares likely using stock to fulfill part of that payment.
Ares’ growth strategy has been heavily reliant on acquisitions in recent years. In 2021, the firm acquired Landmark Partners for $1.1 billion, followed by the purchase of US-based Black Creek and Asia-focused Crescent Point Capital.
Arougheti said the deal comes at an opportune time as commercial real estate investor sentiment has brightened up in anticipation of Fed rate cuts, which could improve property values in the coming years.
“We are able to come into the deal having underwritten property values in a higher interest rate environment,” Arougheti said. “As interest rates come down, you should see an improvement in economics.
“We’re buying in at the right time.”
Source: mpamag.com