Blue Owl Capital and Blue Owl Capital Corporation III sign merger agreement

Blue Owl Capital (OBDC) and Blue Owl Capital Corporation III (OBDE) have entered into a definitive merger agreement, with OBDC as the surviving company, subject to certain shareholder approvals and other customary closing conditions. Both boards of directors have unanimously approved the transaction. The proposed merger will increase OBDC’s total investments by approximately 30%. The combined company is expected to be the second largest externally managed, publicly traded BDC by total assets. The proposed merger is expected to be accretive to NII over time, driven by operational savings through the elimination of duplicative expenses, which both OBDC and OBDE estimate could be in excess of $5M in the first year. The terms of the transaction allow for potential NAV per share accretion to OBDC if shares of OBDC are trading above OBDC’s NAV per share at the time of closing. Shareholders of OBDE will receive newly issued shares of OBDC for each share of OBDE based on the Exchange Ratio determined prior to closing. Prior to the anticipated closing of the proposed merger, OBDC and OBDE intend to declare and pay ordinary course quarterly dividends. OBDE will declare a dividend to OBDE’s shareholders equal to any undistributed net investment income estimated to be remaining as of the closing of the proposed merger. This will include any unpaid special dividends previously declared in conjunction with OBDE’s listing in January 2024. Following the closing of the proposed merger, OBDC’s existing $150M share repurchase program will remain in place. The combined company will be externally managed by Blue Owl Credit Advisors LLC, and all current OBDC officers and directors will remain in their current roles. The combined company will trade under the ticker “OBDC” on the NYSE. The transaction is expected to close in Q1 2025.