WASHINGTON (dpa-AFX) - Investment firm KKR & Co. Inc. (KKR) on Thursday said it has agreed to acquire Arctos Partners, an institutional investor in professional sports franchise stakes, by paying $1.4 billion initially.
The initial payment consists of $300 million in cash, $900 million in KKR equity to existing Arctos shareholders, and $200 million in additional equity to be allocated by 2028. The equity portion will be subject to vesting through 2033. KKR may also pay up to an additional $550 million in future equity based on KKR share price performance and business-specific targetsand vesting through 2031.
KKR said the acquisition is expected to be immediately accretive to earnings per share after closing.
Founded in 2019, Arctos manages about $15 billion in assets under management and specializes in providing capital solutions to professional sports franchises and alternative asset managers. The firm is the largest institutional investor in sports franchise stakes and is the only investor approved for multiteam ownership across all five major U.S. leagues.
KKR said the acquisition will expand its presence in long-duration alternative assets and strengthen its sourcing and origination capabilities. Bringing Arctos onto its platform will also broaden KKR's exposure to the rapidly growing markets for sports investing, GP solutions, and private equity secondaries.
Following the closing, Arctos Managing Partners Ian Charles and Doc O'Connor will join KKR as Partners, and Arctos' operations will be integrated into a newly formed unit, KKR Solutions, to be led by Charles. The business will include Arctos' Sports and Keystone businesses and serve as the foundation for KKR's expanded secondaries platform.
KKR added that, after the transaction, perpetual and long-dated capital will represent about 53% of its $759 billion in total assets under management.
KKR shares are trading more than 2% in pre-market trading after closing at $104.77 on Wednesday.
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