Amid a CEO Switch, a Titan Seals a $3.3B+ Deal
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Thursday, December 30, 2021

Amid a CEO Switch, a Titan Seals a $3.3B+ Deal

While preparing for a handoff at the very top, a $1.63-trillion-AUM (as of November 30), publicly traded mutual fund titan has acquired a fixed income-focused alts shop, as planned.

Yesterday, Rob Sharps (president, head of investments, and group chief investment officer of T. Rowe Price Group, Inc. [profile]) and Glenn August (founder and CEO of Oak Hill Advisors, L.P., i.e. OHA), confirmed that Baltimore-based T. Rowe has closed on its purchase of New York City-based OHA. The deal was first unveiled on October 28.

OHA had $56 billion in "capital under management" as of November 30, and the firm has more than 300 people on staff. T. Rowe paid $3.3 billion upfront (74 percent in cash, and 26 percent in T. Rowe stock) for OHA, with the promise of a potential earnout of up to $900 million more in cash, starting in 2025 (which could push the total price to up to $4.2 billion). Thus, the price tag translates in 5.89 percent of capital under management without the earnout and up to 7.5 percent with the full earnout.

The deal comes as Sharps is expected to take over as T. Rowe's CEO this Saturday. Sharps and August will also join T. Rowe's board of directors.

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