Ares Management Corporation Announces U.S. Direct Lending Origination Activity
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Insights
The closing of $10.1 billion in U.S. direct lending commitments within the fourth quarter and $22.4 billion throughout 2023 by Ares Management Corporation signifies a robust year for the company's Credit Group. This level of activity indicates a strong demand for direct lending solutions and reflects positively on Ares' ability to capitalize on this market segment. The diversity of transactions across various industries, including HVAC, home services, risk management, distribution, manufacturing, insurance, healthcare and veterinary services, demonstrates Ares' broad reach and its strategic positioning in the market.
From a financial perspective, the high volume of transactions could lead to increased interest income and origination fees, potentially enhancing Ares' profitability. The company's role in significant acquisitions and refinancing deals suggests a deepening of relationships with private equity firms, which could lead to repeat business and a solid pipeline of future transactions. However, the performance of these loans will be contingent on the underlying financial health of the borrowers and the economic conditions.
The details provided about Ares' involvement in the credit facilities for various companies highlights a trend towards consolidation and growth in several sectors. The involvement in take-private acquisitions and platform M&A indicates a market environment where companies are seeking to scale operations and expand their market share through strategic acquisitions, often supported by private equity.
For stakeholders, the implications of these transactions could include market consolidation, which may lead to increased pricing power and operational efficiencies for the involved companies. However, there is also the risk of over-leverage and potential challenges in integrating acquisitions, which could impact long-term sustainability. The emphasis on sectors like healthcare, technology and essential services suggests a strategic focus on industries that are likely to experience stable or growing demand.
The substantial amount of direct lending commitments by Ares could be indicative of a liquid credit market and an appetite for leveraged buyouts and refinancing, which are often seen in periods of low-interest rates and economic expansion. The scale of these commitments across various sectors may also suggest optimism about the future performance of these industries and the broader economy.
However, it is crucial to monitor the macroeconomic factors that could affect the repayment abilities of borrowers, such as interest rate hikes, inflationary pressures and economic downturns. These factors could increase the cost of borrowing and impact the default rates, which would have a direct effect on the returns of such direct lending investments. Stakeholders should consider the potential for economic shifts that could alter the risk profile of Ares' credit portfolio.
Approximately
NEW YORK, NY / ACCESSWIRE / February 8, 2024 / Ares Management Corporation announced today that funds managed by its Credit Group (collectively "Ares") closed approximately
AirX Climate Solutions / Gryphon
Ares served as the administrative agent, lead arranger and bookrunner for a senior secured credit facility to support Gryphon's acquisition of AirX Climate Solutions. AirX is a leading designer, manufacturer, distributor, and servicer of highly-engineered, functionally-critical specialty HVAC products across end markets such as telecommunications, data centers, energy storage, rental, educational, industrial, and commercial.
Apex Service Partners / Alpine Investors
Ares served as the administrative agent, joint lead arranger and joint bookrunner for a senior secured facility in connection with Alpine Investors' single-asset continuation transaction to support the continued growth of Apex Service Partners. Apex is a market-leading home services platform providing critical residential HVAC, plumbing, and electrical maintenance, repair, and replacement services throughout the United States.
Avetta / Welsh, Carson, Anderson & Stowe
Ares served as the administrative agent, joint lead arranger and joint bookrunner for a new senior secured credit facility to support the continued growth plan for Avetta. Avetta is a supply chain risk management Software-as-a-Service platform that connects global enterprise customers to contractors and suppliers.
BradyIFS / Kelso and Warburg Pincus
Ares served as a joint lead arranger and joint bookrunner for a senior secured credit facility to support BradyIFS' acquisition of Envoy Solutions. The combined business, which will be owned by Kelso & Company and Warburg Pincus, is one of the largest distribution platforms in North America, providing a broad range of products to customers, including foodservice disposables, janitorial sanitation products, and industrial packaging.
CIRCOR International / KKR
Ares served as the administrative agent, lead arranger and bookrunner for a senior secured credit facility to support KKR's take-private acquisition of CIRCOR International. CIRCOR is a leading manufacturer of pumps, valves, and fluid control components for industrial and aerospace & defense end markets.
DOXA Insurance / Goldman Sachs
Ares served as the administrative agent, joint lead arranger, and joint bookrunner for a senior secured credit facility supporting Goldman Sachs' acquisition of DOXA Insurance. DOXA is a leading specialty managing general agent insurance distribution platform underwriting risk on behalf of insurance carriers across 15+ programs, covering a variety of different end-markets and risk classes.
Exostar / Arlington Capital Partners
Ares served as the administrative agent, joint lead arranger and joint bookrunner for a senior secured credit facility to support Arlington Capital Partners' acquisition of Exostar. Exostar is a leading provider of mission critical supply chain, identity management, and collaboration software solutions for A&D, healthcare, and life sciences customers.
Omega Healthcare / Goldman Sachs
Ares served as the administrative agent, joint lead arranger and joint bookrunner for a new senior secured credit facility to support Goldman Sachs' continued growth plans for Omega Healthcare. Omega Healthcare is a leading provider of outsourced Revenue Cycle Management services to the U.S. healthcare industry.
PetVet Care Centers / KKR
Ares served as a joint lead arranger and joint bookrunner for a senior secured credit facility for the refinancing of the Company's existing capital structure to support KKR's continued growth plans for PetVet Care Centers. PetVet is a leading national network of veterinary hospitals in the US, operating general practice and specialty veterinary hospitals for pets.
Road Safety Services / Harvest Partners
Ares served as the administrative agent, lead arranger and bookrunner for a senior secured credit facility to support the acquisition of Road Safety Services by funds managed by Harvest Partners. Road Safety Services is a market-leading provider of Pavement Marking and Traffic Control Services.
Vertex Service Partners / Alpine Investors
Ares served as the administrative agent, joint lead arranger and joint bookrunner for a senior secured credit facility to support platform M&A for Vertex, an existing Alpine portfolio company. Vertex is an exterior residential services platform focused on residential repair and replacement roofing services (i.e., roofing, windows, siding, gutters).
VIVE Collision / Greenbriar Equity Group
Ares served as the administrative agent, sole lead arranger and sole bookrunner for a senior secured credit facility to support Greenbriar Equity Group's acquisition of VIVE Collision. VIVE is a leading operator of collision repair centers in the northeast United States.
About Ares Management Corporation
Ares Management Corporation (NYSE:ARES) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, private equity, real estate and infrastructure asset classes. We seek to provide flexible capital to support businesses and create value for our stakeholders and within our communities. By collaborating across our investment groups, we aim to generate consistent and attractive investment returns throughout market cycles. As of December 31, 2023, Ares Management Corporation's global platform had approximately
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SOURCE: Ares Management Corporation
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