T. Rowe Price pushes into alternative credit with $4.2B Oak Hill Advisors buy

November 18, 2021

T. Rowe Price (NASDAQ:TROW) agrees to buy alternative credit manager Oak Hill Advisors LP and related entities for up to $4.2B, with $3.3B due at closing.

About 74% of the price will bin in cash and 26% in TROW common stock.

Oak Hill will become T. Rowe's (TROW) private markets platform, accelerating the asset manager's expansion into alternative investment markets at a time when institutional and retail investors are seeking higher yields and risk-adjusted returns in a low rate environment.

The acquisition will complement its existing global platform and its core investments and distribution capabilities, T. Rowe (TROW) said.

The company may pay up to an additional $900M in cash upon achievement of certain business milestones beginning in 2025. The price includes the retirement of OHA debt outstanding at closing.

Excluding amortization and intangibles and the expense impact of the earnout, the acquisition is expected to be accretive to T. Rowe Price (TROW) diluted EPS by a low-to-mid single digit percentage in 2022.

The companies expect to complete the transaction in Q4 2021.
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With $53B of capital under management as of July 31, 2021, across its private, distressed, special situations, liquid, structured credit, and real asset strategies and more than 300 employees, OHA has generated attractive risk-adjusted returns over its more than 30-year history, the companies said.

For this year T. Rowe Price 's (located in Baltimore) revenue will be around 7.66 billion USD. This is according to the average of the analysts' estimates. This is rather significant more than 2021's revenue of 6.21 billion USD.

Historical revenues and results T. Rowe Price plus estimates 2021

The analysts expect for 2021 a net profit of 2.92 billion USD. The majority of the analysts expects for this year a profit per share of 12.74 USD. Based on this the price/earnings-ratio is 16.89.

Huge dividend T. Rowe Price

Per share the analysts expect a dividend of 6.9 USD per share. Thus the dividend yield equals 3.21 percent. The average dividend yield of the financial companies is an attractive 2.24 percent.

T. Rowe Price 's market capitalization is based on the number of outstanding shares around 50.6 billion USD. 58

On Tuesday the stock closed at 215.14 USD.

Historical stock prices T. Rowe Price

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