Rithm Capital Corp., the real estate investment trust that operates NewRez, Caliber and several other businesses, entered into a definitive agreement to acquire Sculptor Capital Management Inc. for $639 million, the company announced on Monday.
The deal, if approved by regulators, will bring to Rithm Sculptor’s $34 billion of assets under management, including real estate, credit and multi-strategy investing spectrum. To Sculptor, Rithm will provide capital to accelerate growth across sectors and seed new funds and strategies.
Rithm is paying $11.15 per Class A share of Sculptor – a premium of 18% over the closing price on July 21 – with cash on hand and available liquidity. The transaction is expected to be neutral to Rithm earnings in 2024 and accretive in 2025.
In the first quarter of 2023, Rithm had a GAAP net income of $68.9 million, compared to $81.8 million in the previous quarter. The company had $1.4 billion in cash. Rithm is scheduled to release second-quarter earnings on August 2.
Michael Nierenberg, chairman, CEO and president of Rithm Capital, said in a statement that the transaction is “transformational.”
“Sculptor’s $34 billion of AUM coupled with Rithm’s $7bn of permanent equity capital and $30+ billion balance sheet creates a world-class asset management business,” Nierenberg said.
Sculptor will operate as a subsidiary of Rithm, led by Jimmy Levin as CIO and executive managing partner, who will report to Nierenberg. Sculptors’ investment and leadership teams will continue in their roles.
“We have long sought a partner with the stable capital structure, culture and vision to help unlock the potential for our platform to deliver more and greater value to our fund investors,” Levin said in a statement.
Sculptor formed on November 17 a special committee of independent directors to explore potential transactions. Sculptor’s leadership has agreed to vote their shares, representing about 26% of the outstanding voting shares, in favor of the transaction. The board of directors of Rithm and Sculptor have approved the deal.
The transaction, subject to customary closing conditions, is expected to close in the fourth quarter of 2023.
The deal with Sculptor comes four days after Rithm’s acquisition of $1.4 billion worth of unsecured personal loans from Goldman Sachs‘ Marcus business unit. Rithm bought the portfolio at a discount, Nierenberg told Bloomberg.
“This purchase is extremely attractive to us building off our past and current expertise in consumer finance,” Nierenberg said in a statement.
In another potential transaction, Rithm said in May that it was considering spinning off the mortgage division to aid its flagging stock, which company executives described as “extremely undervalued.”
