Blue Owl Capital (OWL) to Acquire Oak Street Real Estate Capital

Blue Owl Capital Inc. ("Blue Owl") (NYSE: OWL) announced today it has entered into a definitive merger agreement to acquire Oak Street Real Estate Capital, LLC ("Oak Street") and its investment advisory business. The transaction is expected to close in the fourth quarter of 2021 and is subject to customary closing conditions.

The closing purchase price of $950 million will be funded through a combination of cash and Blue Owl common units (up to an aggregate of approximately 39 million Blue Owl common units issuable at closing). In addition, upon the achievement of certain performance thresholds, Oak Street equity holders will be entitled to earnouts up to a total of approximately $650 million, payable in cash at future dates or in Blue Owl common units (up to an aggregate of approximately 39 million Blue Owl common units subject to vesting). The transaction is anticipated to be approximately 5- 7% accretive to Distributable Earnings per Share starting in 2022.

Oak Street is a Chicago-based firm, founded in 2009 with over 35 employees and with $10.8 billion of assets under management as of June 30, 2021. The firm focuses on two primary strategies: structuring sale-leasebacks, which includes triple net leases, as well as providing seed and strategic capital.

Oak Street has built the industry's preeminent net lease platform with meaningful capital, scale and the expertise necessary to enter into large, complex sale-leaseback transactions with major, creditworthy corporations. The net lease funds provide corporate tenants with the ability to optimize their balance sheets, delivering immediate liquidity, tax benefits, and operational flexibility. Oak Street's active net lease funds primarily focus on single tenant properties, net leased to investment grade and creditworthy tenants, under long duration leases, providing for predictable income. The firm is a market leader in providing unique and flexible real estate solutions to a variety of organizations including corporations, healthcare systems, universities, and government entities.

The Seeding and Strategic Capital business focuses on investing in early-stage real estate managers across various industry sectors. The platform provides strategic institutional capital to managers typically enhanced by attractive general partnership economics and an active governance role. The platform seeks to work with strongly aligned management teams with leading investment capabilities, oftentimes led and controlled by women and minorities.

Doug Ostrover, Co-Founder and CEO of Blue Owl, said: "We are very excited about this strategic transaction and believe that Oak Street's experienced team and strong franchise will both contribute to and benefit from the scale and positive network effects of the Blue Owl platform."

Marc Lipschultz, Co-Founder and Co-President of Blue Owl, said: "Oak Street has created a market-leading platform in the net lease sector, leveraging the expertise and disciplined underwriting of its investment team to generate very strong returns for its investors. We believe their focus on flexible real estate related financing solutions will be very complementary to our existing Direct Lending and GP solutions capabilities."

Michael Rees, Co-Founder and Co-President of Blue Owl, added: "One of the many key synergies with Oak Street is that the firm provides leading products to the high-net-worth and retail channels, a critical part of Blue Owl's business strategy."

Marc Zahr, Co-Founder and CEO of Oak Street, said: "There is a strong fit between Blue Owl and Oak Street, highlighted by our mutual drive to be market leaders in what we do, our shared deep appreciation for the value of long-duration capital, and our focus on downside protection and robust income generation for our investors. My team and I look forward to partnering with the Blue Owl team to bring Oak Street's differentiated product offerings to a new base of investors and to collaborate to bring additional investment opportunities to investors in Oak Street's funds down the line."

Upon closing of the transaction, key members of the Oak Street leadership team will remain in place leading the Oak Street business, and Oak Street's Chicago office will become an additional office for Blue Owl. In addition, Marc Zahr will join Blue Owl's Board of Directors and Executive Committee.

A supplemental investor presentation on the transaction is available on the Investor Resources section of Blue Owl's website at www.blueowl.com.

Kirkland & Ellis LLP acted as legal counsel to Blue Owl. Berkshire Global Advisors served as financial advisor and Willkie Farr & Gallagher LLP acted as legal counsel to Oak Street.

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