BlackRock agrees $12.5bn GIP acquisition

April 2024 | DEALFRONT | PRIVATE EQUITY & VENTURE CAPITAL

Financier Worldwide Magazine

April 2024 Issue

In what is a significant push into private market investments as well as its largest acquisition in 15 years, US multinational investment company BlackRock, Inc. is to acquire private equity firm Global Infrastructure Partners (GIP) in a transaction valued at $12.5bn.

Under the terms of the agreement, BlackRock will acquire 100 percent of the business and assets of GIP for total consideration of $3bn in cash and approximately 12 million shares of BlackRock common stock.

The combination of GIP and BlackRock’s highly complementary infrastructure offerings creates a comprehensive global infrastructure franchise with differentiated origination and asset management capabilities. The over $150bn combined business will seek to deliver clients market-leading, holistic infrastructure expertise across equity, debt and solutions at substantial scale.

A $1 trillion market, infrastructure is forecast to be one of the fastest growing segments of private markets in the years ahead, with a number of long-term structural trends supporting an acceleration in infrastructure investment. These include increasing global demand for upgraded digital infrastructure, renewed investment in logistical hubs and a movement toward decarbonisation and energy security in many parts of the world.

“Infrastructure is one of the most exciting long-term investment opportunities, as a number of structural shifts reshape the global economy,” said Laurence D. Fink, chairman and chief executive of BlackRock. “We believe the expansion of both physical and digital infrastructure will continue to accelerate, as governments prioritise self-sufficiency and security through increased domestic industrial capacity, energy independence, and onshoring or near-shoring of critical sectors.

“We founded BlackRock 35 years ago based on a unique understanding of investment risk and the factors and forces driving investment returns,” he continued. “GIP’s deep understanding of the factors and forces driving operational efficiency for long-term value creation have made them a global leader in infrastructure investing.”

A world leading independent infrastructure investor, GIP manages over $100bn in client assets across infrastructure equity and debt, with a focus on energy, transport, water and waste, and digital sectors. Founded in 2006, GIP’s performance has been driven by proprietary origination, operational improvements and timely exits. It has successfully scaled its global equity flagship series, with the most recent fully invested flagship fund in 2019 surpassing $22bn.

“We share with BlackRock a culture of collaboration, client focus, investment partnership and commitment to excellence,” said Bayo Ogunlesi, founding partner of GIP. “Investors have adopted private infrastructure investing for its ability to provide stable cashflows, less correlated returns and a hedge against inflation.”

The GIP management team, led by Mr Ogunlesi and four of its founding partners, will lead the combined infrastructure platform. Subject to completion of customary onboarding procedures, BlackRock has also agreed to appoint Mr Ogunlesi to the board.

Serving as lead financial adviser to BlackRock is Perella Weinberg Partners, with Skadden, Arps, Slate, Meagher & Flom and Fried, Frank, Harris, Shriver & Jacobson LLP acting as legal counsel. Evercore served as lead financial adviser and Kirkland & Ellis LLP and Debevoise & Plimpton LLP acted as legal counsel to GIP.

The transaction is expected to close in the third quarter of 2024 subject to customary regulatory approvals and other closing conditions.

Mr Fink concluded: “Bringing these two firms together will create the infrastructure platform to deliver best-in-class investment opportunities for clients globally, and we could not be more excited about the opportunities ahead of us.”

Fraser Tennant