Investcorp's $11.7 billion credit management unit in New York acquired a majority ownership interest in CM Investment Partners, the investment adviser to CM Finance, the company announced.
Under the deal, Investcorp Credit Management, a subsidiary of Investcorp Bank with $26.7 billion in assets under management as of March 31, aims to grow its business in the U.S. credit market, a Wednesday news release said.
Investcorp entered into a definitive stock purchase and transaction agreement with CM Finance, in which it will purchase shares of CM Finance's common stock.
The transaction is expected to close in the third quarter, and will make Investcorp the majority owner of CMIP. Michael Mauer and Christopher Jansen, CMIP co-chief investment officers, will maintain a minority ownership interest in the firm, the news release said.
The deal marks Investcorp's entry into middle-market lending in the U.S., Rishi Kapoor, co-CEO of Investcorp, said in a statement in the news release. "We are seeing significant opportunities in this space and we believe that this acquisition will enable us to broaden our footprint in the U.S. credit market and capitalize on these opportunities going forward. It also allows us to reach a new investor segment, as we look to grow our client base including the shareholders of CM Finance and other high-net-worth individuals in the U.S.," he said.
New York-based CMIP manages the investment activities of CM Finance, which seeks to invest primarily in middle-market companies that have annual revenues of at least $50 million and earnings before interest, taxes, depreciation and amortization of at least $15 million, according to the release.