Morgan Stanley says HPS deal adds fuel to BlackRock private markets growth engine

Morgan Stanley notes that BlackRock (BLK) has announced the acquisition of HPS Investment Partners for $12B in an all-stock transaction, further expanding private markets capabilities. The firm sees BlackRock paying about 30-times FRE and mid-20s EBITDA multiple. Morgan Stanley says this acquisition supports its Overweight BlackRock thesis as it views the deal extending the company’s runway for growth and bolstering the size, scale and presence of BlackRock’s private markets platform with pro forma private credit AUM of $240B of AUM. The firm has an Overweight rating on BlackRock with a price target of $1,245 on the shares.