LOS
ANGELES, Oct. 16, 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 including the European Business, GA
Europe, and Real Estate 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 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 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
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