BlackRock and Kreos Capital entered into a definitive agreement under which BlackRock will acquire full control of Kreos, which is a provider of growth and venture debt financing to companies in the technology and healthcare industries.
The acquisition of Kreos adds to BlackRock’s position as a global credit asset manager and advances its ambitions to provide clients with a range of private market investment products and solutions. Kreos complements BlackRock’s global credit business, while the firm’s adjacent asset class unlocks additional private debt capabilities for BlackRock’s clients to access a larger proportion of the risk/return spectrum.
“Over the past 20 years, BlackRock has built leading private debt capabilities to help clients achieve a variety of investment goals by aligning proven investment excellence with long term market opportunities,” James Keenan, CIO and global head of BlackRock Private Credit, said. “The Kreos team has built a world class investment process and delivered for clients through multiple cycles. Coupled with our expectation that growth and venture lending will figure prominently in the expansion of the global direct lending opportunity set going forward, we believe this is an opportune time to welcome the Kreos team to BlackRock.”
“Private debt investing has become an increasingly important component of investors’ portfolios,” Stephan Caron, head of EMEA private debt at BlackRock, said. “BlackRock’s recent Global Private Market Survey found that more than half of respondents plan to increase their private credit holdings in 2023. Current market dynamics have made private credit an attractive asset class as investors focus on its income generation, low volatility, portfolio diversification and its low defaults versus public markets. The addition of this high-quality team, with an excellent track record across multiple market cycles, creates an opportunity for BlackRock to offer a larger proportion of the risk/return spectrum to investors globally.”
“As a pioneer of private debt solutions for high growth technology and healthcare companies in Europe and Israel, Kreos is now taking the next step by accelerating the business and partnering with BlackRock,” Mårten Vading, co-founder and general partner at Kreos Capital, said. “The transaction enables us to leverage BlackRock’s scale, resources, and technology to create a holistic product offering that serves innovative companies globally.”
“We are excited to see BlackRock’s continued commitment to private debt in general, and growth lending specifically,” Raoul Stein and Ross Ahlgren, co-founders and general partners at Kreos Capital, said in a joint statement. “The combination of BlackRock and Kreos will provide a wide range of credit solutions to the growth ecosystem. The acquisition of Kreos by BlackRock is a testimony to the strength and importance of the innovation and technology sectors to the world’s leading asset manager.”
The transaction, which is expected to close in Q3/23, is subject to customary regulatory and closing conditions. According to BlackRock, the financial impact of the transaction will not material to its earnings.
Moelis & Company acted as exclusive financial adviser and Goodwin Procter London provided legal advice to Kreos Capital. Skadden, Arps, Slate, Meagher & Flom provided legal advice to BlackRock.
