January 12, (THEWILL) – BlackRock has agreed to offer $12.5 billion in cash and stock, to acquire a private equity firm Global Infrastructure Partners (GIP), founded by Adebayo Ogunlesi.
The deal includes $3 billion in cash and 12 million BlackRock shares.
Founded in 2006 by Ogunlesi, with backing from General Electric and Credit Suisse, GIP and its portfolio companies have combined annual revenues of more than US$80 billion.
According to the deal, while about 30 percent of shares will be deferred for about five years, BlackRock will issue debt to cover the cash portion.
Also, five of GIP’s founding partners will join BlackRock, including its Chairman Bayo Ogunlesi, who will also join BlackRock’s board of directors.
Ogunlesi currently serves as Goldman Sachs Group’s lead director. Goldman CEO, David Solomon, said on Friday, that Ogunlesi will step down from Goldman Sachs’ board following his move to BlackRock,
The acquisition of GIP, which manages US$100 billion, is the biggest deal in more than a decade for BlackRock and a major step by CEO Larry Fink to transform the firm into a key player in the rapidly growing market for private and alternative assets.
“The unprecedented need for new infrastructure – for digital infrastructure, for upgraded logistics hubs and decarbonisation and energy security – coupled with record high government deficits means that private capital will be needed like never before. This will be one of the fastest-growing areas of our industry over the next 10 years”, Fink and BlackRock President Rob Kapito said in a statement on Friday.
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