NewStar to Acquire Fifth Street’s CLO Business


July 10, 2017

On July 7, 2017, Seward & Kissel client NewStar Financial, Inc. (NASDAQ:NEWS) announced that it will acquire middle market CLO manager Fifth Street CLO Management LLC.

Upon closing, Fifth Street CLO Management LLC (“FSCM”) will become a wholly owned subsidiary of NewStar Financial, Inc. (“NewStar”). NewStar’s middle market investment team will assume the management responsibilities of two CLOs currently managed by FSCM.

The estimated purchase price for FSCM is approximately $16 million, net of $13 million of assumed indebtedness. In addition, the estimated purchase price will be adjusted, based on certain working capital items at the closing. The acquisition will add approximately $726 million to the assets under management of NewStar, increasing total pro forma AUM to approximately $7.3 billion. The transaction is expected to close in the third quarter of 2017, subject to certain investor consents and other closing conditions.

Formed in 2015, FSCM manages Fifth Street Asset Management, Inc.’s middle market CLO business. The two CLOs managed by FSCM are backed by middle market loans, with FSCM holding certain interests in its sponsored CLOs, primarily to comply with regulatory risk retention requirements.

NewStar is a commercial finance company with a focus on middle market direct lending and asset management. NewStar is headquartered in Boston, Massachusetts, with regional offices in Illinois, Connecticut and New York.

A Seward & Kissel team led by partners Craig Sklar, Greg Cioffi, Gary Anderson, counsel Andrew Robertson and associates Dora Pulido, Abhijit Kurup and Keith Kessinger represented NewStar in connection with this transaction.

To read the press release: please click here.

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