SALT LAKE CITY--(BUSINESS WIRE)--Bridge Investment Group Holdings Inc. (NYSE: BRDG) (“Bridge” or the “Company”) today announced it has entered into a definitive agreement to acquire substantially all of the business of Newbury Partners LLC (“Newbury”), an investment manager that specializes in acquiring limited partnership interests in private equity funds through secondary transactions. The all-cash transaction is valued at $320.1 million.
Newbury is a leader in the secondaries market, with a focus on acquiring limited partnership interests in established buyout, growth equity and venture capital funds. Founded in 2006, Newbury has raised over $6.2 billion of committed investor capital across five dedicated funds and has invested in over 500 underlying interests on behalf of more than 250 limited partners worldwide. With $4.3 billion in fee earning assets under management, Newbury’s experienced management team has a decades-long track record of investment performance. Newbury has a diverse portfolio, attractive institutional investor base, and strong competitive position in the secondaries market.
The transaction would add significant assets to the Bridge platform, while enabling Bridge to expand into the rapidly growing private equity secondaries market, which continues to see accelerating demand. Newbury’s extensive direct sourcing network and middle market focus allow it to benefit from specialized expertise and drive attractive risk-adjusted returns, which strategy aligns closely with Bridge’s own approach to real estate investments. The addition of Newbury would diversify Bridge’s product offerings and expand its institutional client base, with minimal overlap between Newbury’s fund investors and existing Bridge limited partners. Upon completion of the transaction, Newbury will retain its headquarters in Stamford, Conn., and will continue to be led by its long-standing management team.
Robert Morse, Executive Chairman of Bridge, said, “The acquisition of Newbury is a natural next step in thoughtfully expanding Bridge’s investment platform and capitalizing on a value-enhancing growth opportunity. As investors’ allocations to alternative investments grow, we believe growth in the secondaries market will also accelerate.”
Bridge CEO Jonathan Slager added, “This acquisition is expected to be immediately accretive to Bridge’s core earnings metrics. We see significant near- and long-term growth opportunities to further enhance Bridge’s fee related earnings.”
Richard Lichter, Managing Partner and Founder of Newbury, said, “The opportunity in the secondaries market is as compelling as ever. We are excited about the common vision and fit between Bridge and Newbury and believe strongly that the partnership will accelerate our growth within both our existing strategy and adjacent secondaries opportunities. Bridge has the platform to support our growth, and is the natural next step for Newbury. I am confident that this transaction will position Newbury and Bridge for shared success, and we look forward to working closely with the entire Bridge team to realize the benefits of this complementary combination.”
In connection with this transaction, Bridge has entered into a $150 million note purchase agreement pursuant to which its operating company, Bridge Investment Group Holdings LLC, issued two tranches of notes in a private placement. The transaction consists of $120 million of 5.99% notes with a seven-year term and $30 million of 6.10% notes with a ten-year term. The note purchase agreement is contingent upon closing the Newbury transaction and funding would occur at that time, subject to customary closing conditions. Additionally, the Company has exercised an option to increase its Senior Secured Credit Facility from $125 million to $225 million, with full capacity currently available.
Approvals and Timeline to Closing
The transaction is expected to close in the first half of 2023 and is subject to customary closing conditions, including regulatory and investor approvals.
Latham & Watkins LLP and Kirkland & Ellis LLP are serving as legal advisors to Bridge on this transaction. Berkshire Global Advisors is serving as financial advisor and Proskauer Rose LLP is serving as legal advisor to Newbury.
Conference Call Information
A conference call to discuss the transaction is scheduled for today at 8:30 am Eastern Time. A supplemental presentation is available by logging on to Bridge’s website at www.ir.bridgeig.com.
Interested parties may access the conference call live over the phone by dialing 1-877-405-1210 (domestic) or 1-201-689-8721 (international). Participants are asked to dial in a few minutes prior to the call to register for the event. The event will also be available live via webcast which can be accessed here or from our Investor Relations website https://ir.bridgeig.com.
An audio replay of the conference call will be available approximately three hours after the conference call until 11:59 p.m. ET on February 28, 2023 and can be accessed by dialing 1-877-660-6853 (domestic) or 1-201-612-7415 (international), and providing the passcode 13736320.
About Bridge Investment Group
Bridge is a leading, vertically integrated real estate investment manager, diversified across specialized asset classes, with approximately $43.3 billion of assets under management as of December 31, 2022. Bridge combines its nationwide operating platform with dedicated teams of investment professionals focused on select U.S. real estate verticals: residential rental, office, development, logistics properties, net lease, real estate-backed credit, renewable energy, and prop tech.
About Newbury Partners
Newbury is a leading institutional investor in the private equity secondaries market. The firm was established in 2006 and is led by a deeply experienced team. Newbury has raised more than $6.2 billion of committed investor capital from more than 250 limited partners worldwide and has returned more than $4.2 billion in distributions since inception. The firm currently manages more than $4.3 billion of fee earning committed capital. Across its series of five funds to date, the Newbury team has completed more than 200 secondary transactions encompassing more than 500 underlying fund interests and has made more than 50 co-investments.
This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future events or our future performance or financial condition. All statements other than statements of historical facts may be forward-looking statements, including statements relating to the expected timing, completion and effects of the transaction with Newbury or the financing contemplated by the note purchase agreement; the expected benefits of the transaction, including future synergies and growth opportunities; and the future business and prospects of Bridge and Newbury. In some cases, you can identify forward-looking statements by terms such as “outlook,” “could,” “believes,” “expects,” “potential,” “opportunity,” “continues,” “may,” “will,” “should,” “over time,” “seeks,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” “foresees” or negative versions of those words, other comparable words or other statements that do not relate to historical or factual matters. Accordingly, we caution you that any such forward-looking statements are based on our beliefs, assumptions and expectations as of the date made, taking into account all information available to us at that time. These statements are not guarantees of future performance, conditions or results and involve a number of risks and uncertainties that are difficult to predict and beyond our control. Bridge may not be able to complete the proposed transaction or obtain the proposed financing on the terms described above or at all because of a number of factors, including, without limitation, (i) the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive transaction agreement or the note purchase agreement, (ii) the failure of the parties to satisfy the closing conditions to the transaction or the financing and (iii) the effect of the announcement of the transaction on the ability of the parties to retain and hire key personnel and maintain their operating results and business generally. Actual results may differ materially from those express or implied in the forward-looking statements as a result of a number of factors, including but not limited to those risks described from time to time in our filings with the Securities and Exchange Commission. Any forward-looking statement speaks only as of the date on which it is made. Bridge undertakes no duty to publicly update any forward-looking statements herein, on the webcast/conference call, or otherwise, whether as a result of new information, future developments or otherwise, except as required by law. Nothing in this press release constitutes an offer to sell or solicitation of an offer to buy any securities of the Company or any investment fund managed by the Company or its affiliates.