Concludes
Previously Announced Review of Strategic Alternatives for the Great American
Group Businesses
LOS ANGELES, Oct. 14, 2024 /PRNewswire/ -- B. Riley
Financial, Inc. (Nasdaq: RILY) ("B. Riley" and the
"Company"), a diversified financial services platform, and funds
managed by Oaktree Capital Management, L.P. ("Oaktree"), have signed
a definitive agreement (the "Agreement") to establish a partnership
in Great American Holdings, LLC, a newly formed holding company ("Great
American NewCo").
Prior to the closing of the
transactions contemplated by the Agreement, B. Riley will undertake a
pre-closing internal reorganization and will contribute all of the interests in
B. Riley's Appraisal and Valuation Services, Retail, Wholesale & Industrial
Solutions and Real Estate Advisory businesses (collectively known as the
"Great American Group") to Great American NewCo.
At the closing of the
transaction, B. Riley will receive total consideration consisting of
approximately $203 million in cash, subject to certain purchase price
adjustments, Class B Preferred Units of Great American NewCo with an initial
aggregate liquidation preference of approximately $183 million, and Class A
Common Units of NewCo representing approximately 47% of the total outstanding
common units. Oaktree will acquire Class A Preferred Units of Great American
NewCo with an initial liquidation preference of approximately $203 million, as
well as Class A Common Units representing approximately 53% of the aggregate
amount of the issued and outstanding Class A Common Units of Great American
NewCo, in exchange for cash consideration of approximately $203 million (the
"Proposed Transaction"), implying a total enterprise value for the
Great American NewCo of $386 million. The transaction has been approved by the
Board of Directors of the Company and is subject to the receipt of required
regulatory approvals and other customary closing conditions. It is expected to
close in the fourth quarter of 2024.
Bryant Riley, Chairman and
Co-Chief Executive Officer of B. Riley, said, "I am pleased to be partnering with Oaktree given
its stellar track record and reputation as one of the world's leading asset
managers. We believe Oaktree's scale and expertise in alternative investments
and their strength as a capital provider, combined with the Great American
Group's leading position as a provider of asset disposition, financial advisory
and real estate advisory services, will prove complementary as we join forces
to deliver financial products and services to better serve our clients."
Mr. Riley continued, "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."
"Great American offers an
exciting investment opportunity for Oaktree in a leading valuation appraisal,
asset disposition and real estate advisory platform. We are eager to provide
both capital and our extensive operating expertise to support the future growth
of the business," said Nick Basso, Managing Director at Oaktree.
"As an experienced capital
provider to the financial services sector, we are thrilled to partner with B.
Riley and Great American's talented leadership team. We look forward to
bringing our resources and relationships to support Great American's growth as
an independent platform," said Thomas Casarella, Managing Director at
Oaktree.
Advisors
Moelis & Company
LLC served as the exclusive financial advisor to B. Riley, and Sullivan &
Cromwell LLP served as legal advisor to B. Riley. Wachtell, Lipton, Rosen
& Katz served as legal advisor to Oaktree.
About B. Riley Financial
B. Riley Financial is a
diversified financial services platform that delivers tailored solutions to
meet the strategic, operational, and capital needs of its clients and partners.
B. Riley leverages cross-platform expertise to provide clients with full service,
collaborative solutions at every stage of the business life cycle. Through its
affiliated subsidiaries, B. Riley provides end-to-end financial services across
investment banking, institutional brokerage, private wealth and investment
management, financial consulting, corporate restructuring, operations
management, risk and compliance, due diligence, forensic accounting, litigation
support, appraisal and valuation, auction, and liquidation services. B. Riley
opportunistically invests to benefit its shareholders, and certain affiliates
originate and underwrite senior secured loans for asset-rich companies. B.
Riley refers to B. Riley Financial, Inc. and/or one or more of its subsidiaries
or affiliates. For more information, please visit www.brileyfin.com.
About Oaktree
Oaktree is a leader among
global investment managers specializing in alternative investments, with $193
billion in assets under management as of June 30, 2024. The firm emphasizes an
opportunistic, value-oriented and risk-controlled approach to investments in
credit, private equity, real estate and listed equities. The firm has over
1,200 employees and offices in 23 cities worldwide. For additional information,
please visit Oaktree's website at http://www.oaktreecapital.com/.
Forward-Looking Statements
This press release contains
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. All statements other than statements of
historical fact are forward-looking statements. These forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the Company's performance or achievements to be materially
different from any expected future results, performance, or achievements.
Forward-looking statements speak only as of the date they are made and the
Company assumes no duty to update forward looking statements, except as
required by law. Actual future results, performance or achievements may differ
materially from historical results or those anticipated depending on a variety
of factors, some of which are beyond the control of the Company, including, but
not limited to, the occurrence of any event, change or other circumstances that
could give rise to the termination of the Agreement; the inability to consummate
the transactions contemplated therein or the failure to satisfy other
conditions to completion of the Proposed Transaction; potential litigation
relating to the Proposed Transaction that could be instituted in connection
with the Agreement; and the risk that the Proposed Transaction will not be
consummated in a timely manner, if at all. In addition to these factors, we
encourage you to review the "Risk Factors" set forth in B. Riley's
Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and
other filings with the United States Securities and Exchange Commission, which
identify important factors, though not necessarily all such factors, that could
cause future outcomes to differ materially from those set forth in the
forward-looking statements in this communication.
Contacts
B. Riley
Investors
ir@brileyfin.com
Media
press@briley.com