8-KSecurities & ListingRegulation FDOther Events+1

BlackRock, Inc. 8-K Report, Unregistered Securities Sale (Dec 3, 2024)

Filed December 3, 2024For Securities:BLK

Summary

BlackRock, Inc. has announced a significant strategic acquisition through a definitive agreement to acquire HPS Investment Partners, a prominent global credit investment manager. This transaction, termed the HPS Transaction, involves the acquisition of 100% of HPS's business and assets. The consideration will be paid in approximately 12.1 million units of a BlackRock subsidiary, which are exchangeable for BlackRock common stock on a 1:1 basis. A portion of this consideration is deferred and contingent upon post-closing conditions and financial performance milestones, with a maximum of approximately 13.7 million shares potentially issuable. The acquisition is expected to close in mid-2025, subject to customary closing conditions, including regulatory approvals. This move signifies BlackRock's continued focus on expanding its capabilities in the alternative asset space, particularly in credit. Investors should monitor the progress of regulatory approvals and the integration of HPS, as this acquisition is poised to enhance BlackRock's growth trajectory and market position in alternative investments.

Key Highlights

  • 1BlackRock to acquire HPS Investment Partners, a global credit investment manager.
  • 2Transaction consideration includes approximately 12.1 million SubCo Units, exchangeable for BlackRock common stock on a 1:1 basis.
  • 3A portion of the consideration is deferred and contingent on post-closing conditions and financial performance milestones.
  • 4Maximum potential issuance of approximately 13.7 million shares of BlackRock common stock.
  • 5Up to $675 million in value allocated for an employee equity retention pool for HPS.
  • 6Acquisition is expected to close in mid-2025, subject to regulatory approvals and other customary conditions.
  • 7Scott Kapnick to join BlackRock's board of directors as a non-voting observer post-closing.

Frequently Asked Questions

BlackRock is acquiring HPS Investment Partners, a leading global credit investment manager. This acquisition is significant as it represents a strategic expansion of BlackRock's capabilities and presence in the alternative asset space, particularly within the credit sector, which is a key growth area for asset managers.

The total consideration for the HPS Transaction is approximately 12.1 million units of a BlackRock subsidiary (SubCo Units). These SubCo Units are exchangeable into BlackRock common stock on a 1:1 basis. Approximately 9.2 million SubCo Units will be paid at closing, with the remainder paid in approximately five years, subject to certain conditions and potential earn-outs for up to an additional 1.6 million SubCo Units.

The HPS Transaction is expected to close in mid-2025. The closing is contingent upon the satisfaction of customary conditions, including the receipt of necessary regulatory approvals (such as under the Hart-Scott-Rodino Act) and other standard closing conditions.

The maximum number of BlackRock common shares that could be issued upon exchange of all SubCo Units is approximately 13.7 million. This issuance, if it occurs, would represent a dilution to existing shareholders. The exact timing and amount of issuance will depend on the satisfaction of post-closing conditions and performance milestones.