8-KSecurities & Listing

Ares Management Corp 8-K Report, Unregistered Securities Sale (Nov 5, 2014)

Filed November 5, 2014For Securities:ARESARES-PB

Summary

This 8-K filing by Ares Management, L.P. (ARES) on November 5, 2014, details an unregistered sale of equity securities in connection with its acquisition of Energy Investors Funds (EIF Management, LLC). As partial consideration for this acquisition, Ares agreed to issue up to 1,578,947 Ares Operating Group Units. These units are subject to exchange for common units of Ares Management, L.P. after a six-month and one-year period following the transaction's closing. This transaction represents a strategic expansion for Ares into the energy infrastructure asset management sector. While the issuance of these units is considered less than 1% of the outstanding Total Units as of October 30, 2014, investors should note the dilutive potential and the structured timeline for unit exchange. The issuance is being conducted under Section 4(a)(2) of the Securities Act of 1933, indicating it's a private placement not requiring full SEC registration.

Key Highlights

  • 1Ares Management, L.P. is acquiring EIF Management, LLC, an energy infrastructure asset manager.
  • 2As part of the acquisition consideration, Ares will issue up to 1,578,947 Ares Operating Group Units.
  • 3These units represent a small percentage (less than 1%) of Ares' total outstanding units as of October 30, 2014.
  • 4The issuance of Ares Operating Group Units is being conducted under Section 4(a)(2) of the Securities Act of 1933 (private placement).
  • 5Half of the issued units will be exchangeable for common units after six months post-closing.
  • 6The remaining half of the issued units will be exchangeable for common units after one year post-closing.

Frequently Asked Questions

This 8-K filing announces an unregistered sale of equity securities by Ares Management, L.P. in connection with its acquisition of Energy Investors Funds (EIF Management, LLC).

The Ares Operating Group Units are a form of equity being issued by a subsidiary of Ares Management, L.P. as partial payment for the acquisition of Energy Investors Funds. They are issued in reliance on Section 4(a)(2) of the Securities Act of 1933, meaning it's a private placement.

One half of the units can be exchanged for common units one-for-one six months after the closing of the transaction. The other half can be exchanged one-for-one for common units one year after the closing of the transaction.

Based on the filing, the total units represent less than 1% of the outstanding Total Units as of October 30, 2014, suggesting a relatively minor immediate dilutive impact. However, the full exchange over time will increase the total number of units.