Posted on 04/18/2022
DigitalBridge Group, Inc. (NYSE: DBRG) has entered into an agreement with affiliates of Wafra Inc. to acquire Wafra’s 31.5% stake in DigitalBridge’s investment management subsidiary (DigitalBridge IM) for $410 million. US dollars of newly issued Class A common stock in DigitalBridge and cash consideration of US$390 million, subject to certain net cash and closing adjustments.
The benefits of the transaction for DigitalBridge and its shareholders are that DigitalBridge’s share of DigitalBridge IM fee-related revenue will increase to 100%. In addition, DigitalBridge will be entitled to 100% of DigitalBridge IM’s business share in performance fees (deferred interest) on future fund offerings.
Once the transaction is finalized, Adel Alderbas, chief investment officer of Wafra, will act as lead advisor to DigitalBridge. In addition to the transaction consideration of US$800 million, Wafra will be entitled to an earn-out of up to US$125 million, subject to certain future performance thresholds, which may be paid up to 50% in DigitalBridge Select Shares. The cash consideration of US$390 million, subject to certain net cash and closing adjustments, will be funded from cash available on DigitalBridge’s balance sheet. The transaction is expected to close in the second quarter of 2022, subject to regulatory approval and other customary closing conditions.
Wafra was advised by Ardea Partners LP as financial advisor and Fried, Frank, Harris, Shriver & Jacobson LLP as legal advisors. DigitalBridge was advised by Barclays as financial advisor and Sullivan & Cromwell as legal advisors.
Transition to conventional C-Corp
DigitalBridge also announced that its board of directors has approved the transition to a conventional C-Corp structure and that DigitalBridge will not be treated as a real estate investment trust (REIT) for tax purposes in 2022.
Wafra belongs to the Public Social Security Institution (PIFSS).