8-KOther EventsExhibits & Filings

Ares Management Corp 8-K Report, Corporate Update (Aug 14, 2015)

Filed August 14, 2015For Securities:ARESARES-PB

Summary

Ares Management Corp. (ARES) filed an 8-K on August 13, 2015, providing updates on significant corporate activities. The company is proceeding with its previously announced business combination and merger with Kayne Anderson Capital Advisors, L.P. (KACALP), a transaction that was initially agreed upon on July 23, 2015. This merger is a key strategic move for Ares Management, likely aimed at expanding its asset management capabilities and market presence. Furthermore, Ares Management announced the successful pricing of a $325 million offering of 5.250% Senior Notes due 2025 by its indirect subsidiary, Ares Finance Co. II LLC. The proceeds from this debt offering are intended to partially fund the aforementioned merger transactions. The notes are guaranteed by several Ares subsidiaries, underscoring the financial commitment to the deal. Investors should note the contingency: if the merger does not close by June 30, 2016, or if the agreement is terminated, the notes will be redeemed at a premium.

Key Highlights

  • 1Ares Management Corp. is progressing with its previously announced merger and business combination with Kayne Anderson Capital Advisors, L.P. (KACALP).
  • 2Ares Finance Co. II LLC, an indirect subsidiary, has priced a $325 million offering of 5.250% Senior Notes due 2025.
  • 3The net proceeds from the notes offering are earmarked to partially finance the acquisition of Kayne Anderson.
  • 4The notes are fully and unconditionally guaranteed on a joint and several basis by multiple Ares subsidiaries, indicating strong parent company support.
  • 5There is a redemption clause for the senior notes: if the merger is not completed by June 30, 2016, or the agreement is terminated, the notes must be redeemed at 101% of their principal amount plus accrued interest.
  • 6The filing incorporates by reference a press release dated August 13, 2015, which likely provides further details on the notes offering and the merger.

Frequently Asked Questions

The primary purpose of the $325 million offering of 5.250% Senior Notes due 2025 by Ares Finance Co. II LLC is to partially fund the ongoing business combination and merger with Kayne Anderson Capital Advisors, L.P. (KACALP).

If the merger with Kayne Anderson does not close by June 30, 2016, or if the merger agreement is terminated before that date, Ares Finance Co. II LLC is obligated to redeem all of the notes. The redemption price will be 101% of the principal amount, plus any accrued and unpaid interest.

The $325 million senior notes are fully and unconditionally guaranteed on a joint and several basis by several Ares subsidiaries, including Ares Holdings L.P., Ares Domestic Holdings L.P., Ares Offshore Holdings L.P., Ares Investments L.P., Ares Real Estate Holdings L.P., Ares Management LLC, Ares Investments Holdings LLC, and Ares Finance Co. LLC.

The merger with Kayne Anderson Capital Advisors, L.P. (KACALP) is a significant strategic transaction for Ares Management Corp. While the 8-K doesn't detail the specific benefits, such mergers in the asset management industry typically aim to expand AUM, diversify strategies, enhance market reach, and achieve operational synergies.