ITEM 1.01 Entry into a Material Definitive Agreement.
On March 30, 2021, BrightSphere Investment Group Inc. (“BrightSphere”), through its subsidiary BrightSphere (Landmark) LLC, a Delaware limited liability company (the “BrightSphere Seller”), entered into an Equity Purchase Agreement (the “Landmark Purchase Agreement”) with Landmark Investment Holdings LP, a Delaware limited partnership (the “Landmark Seller”), Landmark Partners, LLC, a Delaware limited liability company (the “Company”) and subsidiary of the BrightSphere Seller and the Landmark Seller, which hold sixty percent (60%) and forty percent (40%) of the interests in the Company, respectively, and Ares Holdings L.P., a Delaware limited partnership (the “Buyer”), pursuant to which the Buyer will purchase (i) the BrightSphere Seller’s sixty percent (60%) interest in the Company in exchange for $690 million of cash consideration and (ii) the Landmark Seller’s forty percent (40%) interest in the Company in exchange for $390 million comprised of a combination of cash and equity interests of Buyer, representing a total enterprise value of $1,080,000,000. Pursuant to the Landmark Purchase Agreement, the Buyer will purchase the Company on a cash-free, debt-free basis. The transaction is subject to certain customary closing and post-closing adjustments to purchase price, including for cash, debt, working capital, transaction expenses, and changes to the revenue run-rate for clients of the Company prior to closing. The Landmark Purchase Agreement contains customary representations, warranties and covenants of the BrightSphere Seller, the Landmark Seller, and the Company, including, among others, covenants to conduct the business of the Company in the ordinary course during the period between the execution of the Landmark Purchase Agreement and the closing of the transaction. The Landmark Purchase Agreement does not contain any indemnification provisions and the Buyer has obtained, at its own expense, a representations and warranty insurance policy. The closing of the transaction is subject to various closing conditions, including, among others, (i) the receipt of approval, or the expiration or termination of the waiting period, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) clearance from the Securities and Futures Commission of Hong Kong, (iii) the absence of any preliminary or permanent injunction or other order preventing the closing of the transaction, (iv) the absence of a material adverse effect between the signing date and the closing, (v) the accuracy of the fundamental representations and warranties in all but de minimis respects and the accuracy of the general representations and warranties except as would not result in a material adverse effect, (vi) the revenue run-rate for all investment advisory clients of the Company at closing being equal to or greater than 80% of the revenue run-rate for such clients as of January 1, 2021, and (vii) no event occurring that would cause or give rise to a “key person event” or other similarly defined event under the constituent documents of a specified group of Company funds. The Landmark Purchase Agreement contains customary termination provisions, and may be terminated by the parties if the closing does not occur on or before September 30, 2021.
The Buyer has also agreed to acquire the BrightSphere Seller’s carried interest and co-investments in the Company’s funds on the date of closing of the Landmark Purchase Agreement for approximately $34 million, subject to adjustment for certain related cashflow.