Affiliates of the real estate division of Blue Owl Capital have reached an agreement to acquire Sila Realty Trust in an all-cash transaction valued at about $2.4 billion, the companies said on Monday. Under the terms, the buyers will pay $30.38 per share for every outstanding Sila share, representing a roughly 19% premium to Sila's closing price of $25.53 on April 17 - the trading day before the announcement.
Sila Realty Trust, based in Tampa, Florida, holds a portfolio of 137 real estate properties plus three undeveloped land parcels spread across 65 markets in the United States. The REIT focuses on healthcare properties and will be taken private as part of this transaction.
The purchaser group is part of Blue Owl's real assets platform. That division accounts for about one quarter of the New York-based firm's total assets under management, which the company states are approximately $307 billion. Blue Owl's real assets activities include investments in industrial facilities and datacenters, as well as credit secured by other property types.
Blue Owl itself has experienced a notable decline in its publicly traded shares this year, with the stock down by more than 30% so far and slipping below the price at which the company debuted on public markets in 2021. Blue Owl was formed through the combination of private credit firm Owl Rock and the Dyal Capital Partners division of Neuberger Berman.
Large alternative asset managers have faced market headwinds in the past year amid investor concerns that some of the software businesses they invested in or lent to could face disruption from artificial intelligence. The industry has also confronted questions about lending standards and longer-term growth prospects.
Blue Owl in particular drew scrutiny after a proposal last year to merge a non-traded private credit vehicle with a traded version, a move that raised the possibility that wealthy individual investors could incur losses. The company has continued to expand its real assets footprint even as its stock has come under pressure.
Key points:
- Affiliates of Blue Owl's real assets arm will acquire Sila Realty Trust in an all-cash transaction valued at about $2.4 billion.
- The purchase price is $30.38 per share, a roughly 19% premium to Sila's April 17 closing price of $25.53.
- Sila's portfolio comprises 137 properties and three undeveloped land parcels across 65 U.S. markets; Blue Owl's real assets division represents roughly one quarter of its approximately $307 billion AUM.
Risks and uncertainties:
- Blue Owl's stock has fallen more than 30% this year and is trading below its 2021 public offering price, reflecting investor concerns that could affect the firm's access to capital or valuation.
- Broader investor worries about potential disruption to software businesses and doubts about lending standards and growth prospects for large alternative asset managers could continue to pressure sector valuations.
- A previously proposed merger involving a non-traded private credit vehicle and a traded version raised the prospect of losses for wealthy retail investors, an issue that has added to scrutiny of the firm's strategic moves.
Market participants and stakeholders will be watching how Blue Owl integrates Sila's healthcare properties into its real assets platform, and whether the transaction influences investor sentiment toward both the REIT sector and large alternative managers. The companies involved provided the terms of the deal and portfolio details as described above.