It’s official: CPPIB to buy GE’s Antares Capital unit for $12 bln

  • Antares is leading lender for middle-market PE deals in U.S.
  • Antares to be run as independent unit with own board
  • GE to continue to run SSLP and MMGP programs for now

GE’s Chicago-based Antares Capital unit is the leading lender to middle-market private equity-backed transactions in the United States. Over the past five years, Antares has provided more than $120 billion in financing.

“This acquisition exemplifies our strategy to achieve scale in key sectors through platform investments,” said CPPIB’s Chief Executive Officer Mark Wiseman in a prepared statement. “It secures a market-leading business that is exceptionally well positioned.”

CPPIP plans to operate Antares “as a standalone, independent business governed by its own board of directors,” the statement said. “The Company will retain the brand most associated with its long and impressive track record in the U.S. middle market, Antares Capital, and the team responsible for its long-term success led by its Managing Partners, David Brackett and John Martin.”

The previously reported deal had been widely expected to be finalized this week.

GE’s retreat from lending and a broader move to reduce its exposure to its finance arm comes as U.S. regulators move to curb aggressive lending by financial institutions. GE announced plans in April to sell $200 billion worth of finance assets as it focuses on its industrial products business.

In a separate statement, GE said it plans to continue to run the Senior Secured Loan Program (SSLP) – a joint venture between affiliates of GE Capital and affiliates of Ares Capital; and its Middle Market Growth Program (MMGP), a joint venture between affiliates of GE Capital and affiliates of Lone Star Funds; for a period of time to provide CPPIB the opportunity to work with both parties.

If CPPIB is unable to reach deals with both parties GE said it plans to wind down its investments in those two programs.

With this deal, GE said it has now finalized $55 billion worth of asset sales and it remains on track to complete roughly $100 billion worth of asset sales this year.

GE and CPPIB expect the deal to close in the third quarter, pending regulatory approvals. J.P. Morgan Securities LLC and Citigroup advised GE on this transaction, while Credit Suisse and Morgan Stanley acted as CPPIB’s advisors.

CPPIB said Antares will be a strategic, long-term platform investment for its Credit Investments arm.

CPPIB has invested over $16 billion in leveraged loans, high yield bonds, and mezzanine financings since 2009. The GE deal solidifies its foray into the lending sphere as it looks for investment opportunities for its more than C$264 billion ($213.37 billion) in assets under management.

(Reporting by Euan Rocha for Reuters)