Ares Is Said Close to Kayne Anderson Cash-and-Stock Deal

Ares Management LP is close to agreeing on a purchase of Kayne Anderson Capital Advisors, with an announcement likely as early as next week, two people with knowledge of the matter said.

The companies are finalizing details of a cash-and-stock agreement, said the people, who asked not to be named because discussions are ongoing. Bill Mendel, a spokesman for Ares, declined to comment, and Paul Blank, a Kayne Anderson managing director, didn’t respond to a telephone message seeking comment.

The combined firm may be renamed to incorporate the Kayne Anderson brand, and Ric Kayne would take a senior role such as co-chairman alongside Ares Chairman Tony Ressler, people with knowledge of the discussions told Bloomberg last month. The firms, headquartered a block from each other in Los Angeles, have been working out details of the merger for more than two months, the people said.

The combination would bolster energy-related efforts at Ares and accelerate the company’s growth after it went public last year. Kayne Anderson, which manages $28 billion and has 300 employees, has focused on oil and gas operators, energy infrastructure, real estate, middle-market credit, growth private equity and distressed municipal securities since its founding in 1984.

Ares, formed in 1997 by former Drexel Burnham Lambert bankers Ressler and John Kissick, specializes in tradable credit, direct lending, private equity and real estate. It managed $87 billion as of March 31 and has 800 employees.

Shares of Ares have gained about 9 percent this year. Bloomberg reported on June 10 that the companies were in talks to merge.

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