NEW YORK AND CLEVELAND — NorthStar Asset Management Group Inc. (NYSE: NSAM), a global real estate management firm, has entered into a definitive agreement to acquire an 85 percent interest in The Townsend Group, a global real estate investment manager and advisor based in Cleveland. NSAM will acquire the interest in Townsend Group for approximately $380 million, predominantly from funds affiliated with private equity firm GTCR.
Founded in 1983, Townsend Group’s assets under management totaled approximately $12.8 billion as of June 30. The firm has offices in Cleveland, San Francisco, London and Hong Kong.
New York-based NSAM has approximately $24.7 billion in total assets of managed companies as of June 30, including investments under contract or acquired subsequent to the second quarter of 2015.
Since its inception in 1980, GTCR has invested more than $12 billion in over 200 companies. The private equity firm is based in Chicago.
“We are extremely pleased with this strategic opportunity to expand and accelerate our asset management capabilities, both in the United States and internationally, with the acquisition of one of the world’s premier institutional real estate asset management platforms,” says David Hamamoto, executive chairman of NSAM. “Townsend, which sits at the epicenter of the global real estate market, having significant influence over $170 billion of real estate, has a brand and franchise that is second to none.”
Following the closing of the transaction, Townsend’s management team will own the remaining 15 percent of the business and will continue to direct day-to-day operations. The transaction is expected to close in early 2016.
“Terry Ahern and the entire Townsend team have been excellent partners for GTCR. On behalf of GTCR, we’d like to extend our thanks and best wishes to Terry and the other managers and employees at Townsend as they continue working with NSAM,” says Mike Hollander, principal of GTCR.
NSAM has obtained a commitment for $500 million of financing, which will be used to fund the transaction and for general corporate purposes, including repurchases of its common stock.
Morgan Stanley & Co. LLC has acted as sole financial advisor to NSAM on this transaction, and Morgan Stanley Senior Funding Inc. is the lead provider of the $500 million debt financing commitment to NSAM.
Kirkland & Ellis LLP provided legal counsel on the transaction.
The company’s stock price closed on Wednesday, Oct. 14, at $13.95 per share, down from $16.80 per share at this time last year.
— John Nelson