Owl Rock(US:OBDC) Prnewswireยท2024-08-07 20:27Core Viewpoint - The merger between Blue Owl Capital Corporation (OBDC) and Blue Owl Capital Corporation III (OBDE) aims to create the second largest publicly traded Business Development Company (BDC) by total assets, enhancing scale and investment overlap, with a pro forma total asset value of $18.4 billion [1][3]. Group 1: Transaction Overview - The merger agreement has been unanimously approved by the boards of both companies and is subject to shareholder approvals and customary closing conditions [1][14]. - The combined company will have approximately 90% investment overlap, facilitating portfolio consolidation and reducing integration risk [2][3]. Group 2: Financial Implications - The merger is expected to increase OBDC's total investments by about 30%, raising the investment portfolio to approximately $17.7 billion across 256 portfolio companies [3]. - The merger is projected to be accretive to Net Investment Income (NII), with estimated operational savings exceeding $5 million in the first year [6]. Group 3: Market and Structural Benefits - The increased market capitalization may enhance trading liquidity and institutional ownership, while streamlining the organizational structure by eliminating a second diversified publicly traded BDC [4][5]. - The combined company is expected to benefit from a well-balanced capital structure, improving access to long-term, low-cost debt capital [5]. Group 4: Shareholder Considerations - Shareholders of OBDE will receive newly issued shares of OBDC based on a calculated Exchange Ratio, which will be determined prior to closing [8][10]. - The transaction allows for potential NAV per share accretion for OBDC if its shares are trading above NAV at the time of closing [7]. Group 5: Future Steps - The merger is anticipated to close in the first quarter of 2025, pending necessary approvals [14]. - Both companies plan to declare and pay ordinary course quarterly dividends prior to the merger closing [11][12].