Blue Owl Capital (NYSE:OWL), a premier alternative asset manager, announced a significant expansion of its operations with the definitive purchase agreement to acquire Kuvare Insurance Services for $750 million.

The acquisition, poised to close in the second or third quarter of 2024, is a strategic move to broaden Blue Owl’s footprint in the insurance asset management sector.

The transaction will be financed through a mix of $325 million in cash and $425 million in Blue Owl Class A common stock.

Additionally, the deal includes a potential $250 million earnout, dependent on reaching specific future revenue targets.

Concurrent with the acquisition announcement, Blue Owl revealed a strategic $250 million preferred equity investment in Kuvare.

This investment underscores a long-term commitment between the two companies and is aimed at fueling the growth of Kuvare’s insurance businesses, which will, in turn, become new asset management clients for Blue Owl.

The partnership between Blue Owl and Kuvare extends beyond the financial investment.

They have also entered into investment management agreements that enable Blue Owl to manage up to $3 billion of assets, with the potential for further growth.

This arrangement significantly boosts Blue Owl's assets under management (AUM), with an allocation of up to $20 billion in AUM anticipated upon the deal's finalization.