In This Article:
B. Riley Financial has agreed to divest Great American Group, which provides asset valuation services, to Oaktree Capital Management.
The transaction is valued at $386m and is aimed at reducing B. Riley's debt and enhancing its financial position.
Under the agreement, B. Riley and Oaktree will create Great American Holdings, a new holding company (Great American NewCo).
Prior to the new company’s formation, which B. Riley will reorganise internally and its Great American Group will be consolidated into Great American NewCo.
The division being sold comprises the appraisal and valuation services, retail, wholesale & industrial solutions, and real estate advisory businesses.
Upon completion, B. Riley is set to receive approximately $203m in cash, subject to adjustments, and preferred and common units in Great American NewCo.
These include Class B Preferred Units with an initial liquidation preference of around $183m and Class A Common Units representing a 47% stake.
Oaktree, on the other hand, will acquire Class A Preferred Units and Class A Common Units of Great American NewCo, amounting to a 53% interest in the common units.
The strategic move is anticipated to address investor concerns regarding B. Riley's performance and mitigate the impact of its exposure to Franchise Group, the parent company of Vitamin Shoppe.
B. Riley chairman and co-CEO Bryant Riley said: "As we communicated last month, this transaction is an important step in our plan to reduce our debt while reinvesting in our core financial services businesses.
“We are very excited about this new partnership we established with Oaktree in the Great American Group as it will enable meaningful debt reduction while retaining significant equity upside in the business with a highly capable new partner that will increase its future growth prospects.”
The board of directors of B. Riley has approved the deal, which now awaits regulatory approvals and the satisfaction of other customary closing conditions, with an expected closure in the fourth quarter of 2024.
"B. Riley to divest Great American unit to Oaktree Capital for $386m " was originally created and published by Private Banker International, a GlobalData owned brand.
The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.