Alternative investment manager Grosvenor Capital Management is set to become a publicly traded company through a merger with CF Finance Acquisition Corp., a special purpose acquisition company sponsored by Cantor Fitzgerald.
About 30% of Grosvenor shares will be publicly traded and the firm’s management will own the remainder of the equity shares of the combined company “consistent with their historic ownership level of the firm,” according to a Grosvenor news release.
The financial terms of the deal are not being disclosed, Grosvenor spokesman Will Braun said.
After the transaction is completed, the SPAC will be renamed GCM Grosvenor Inc., and its Class A common shares will be traded on the Nasdaq exchange. The deal is “expected to be completed as soon as possible,” the release said.
As part of the transaction agreement, the equity interest in Grosvenor that private equity manager Hellman & Friedman has held since October 2007 will be purchased as part of a pre-existing option, the release said.
Current CFAC shareholders, including Cantor Fitzgerald and other investors will own the remaining outstanding shares of the combined firm. Cantor Fitzgerald will invest $30 million in the newly combined company and the institutional investors agreed to invest a total of $195 million in a private investment in public equity transaction at $10 a share, the release noted.
The Cantor Fitzgerald and PIPE investments in addition to cash held by the existing SPAC vehicle will be used to pay $150 million in cash consideration to selling shareholders, including Hellman & Friedman, as well as to cover transaction expenses, to reduce Grosvenor’s existing debt and to fund the firm’s future growth, according to the release.
There will be no changes to Grosvenor’s leadership, personnel, investment strategies or operations resulting from the merger.
“We believe that becoming a publicly traded company will benefit our clients, our team members and all of our stakeholders. We have long values having external shareholders and we wanted to preserve the accountability and focus that comes with that, said Michael J. Sacks, Grosvenor’s chairman and CEO, in the release.
Grosvenor manages $57 billion in alternative investment strategies.
