The Launch of Great American Group: A New Journey
B. Riley Financial, Inc. is embarking on an exciting new venture with the recent launch of the Great American Group (GA Group). As a leading provider of valuation, appraisal, asset disposition, and real estate services, this transition is aimed at leveraging a robust 30-year track record. The collaboration with Oaktree Capital Management, a noted leader in alternative investments, represents a strategic alliance necessary for driving growth and value.
Insight into the New Partnership
This innovative partnership between B. Riley and Oaktree forms a significant chapter in the financial landscape. Prior to this launch, B. Riley completed a crucial internal restructuring, resulting in the formation of a new holding company known as Great American Holdings, LLC. This strategic move involved the consolidation of several of B. Riley’s operational segments into the GA Group, streamlining their approach to service and value delivery.
Financial Aspects of the Transition
In this transformative process, B. Riley has received a comprehensive consideration package worth approximately $203 million in cash, alongside Class B Preferred Units providing an initial liquidation preference of about $183 million. This transaction also encompasses Class A Common Units representing an estimated 47% stake in Great American NewCo. Such a financial foundation serves not only to cushion this transition but to bolster future prospects.
B. Riley's Anticipated Gains
Significantly, B. Riley is set to realize a remarkable gain of approximately $235 million as a result of this transaction, expected to be reflected in their financial results for the fourth quarter of 2024. Such growth highlights the potential inherent in the GA Group and its role in B. Riley’s larger investment strategy.
Leadership Perspectives on Future Growth
Bryant Riley, the Chairman and Co-Chief Executive Officer of B. Riley, shared his enthusiasm regarding the newly formed GA Group. He emphasized the unique capabilities of Oaktree, particularly their expertise in alternative investments, as a driving force behind GA Group's anticipated success. This partnership not only strengthens B. Riley’s balance sheet but also opens doors to significant equity upside within a sector poised for impressive growth.
About B. Riley Financial and Oaktree
A Leader in Financial Services
B. Riley Financial stands out as a diversified financial services company with a commitment to delivering tailored solutions. This includes a wide range of services that cover every aspect of the business lifecycle, from investment banking to financial consulting and asset management. Through strategic investments and collaborations, B. Riley aims to enhance shareholder value while catering to the unique needs of its clients.
Oaktree's Investment Philosophy
Oaktree, on the other hand, operates as a key player among global investment managers, holding approximately $205 billion in assets under management. Their approach to investments is characterized by a focus on value, risk control, and opportunistic opportunities across various sectors, including credit and real estate. The combination of B. Riley's services and Oaktree's investment strategies promises a strategic synergy meant to fulfill the evolving needs of the market.
Frequently Asked Questions
What is the Great American Group?
The Great American Group is a new independent business launched by B. Riley Financial in partnership with Oaktree to provide industry-leading valuation and appraisal services.
What led to the creation of the GA Group?
The creation of the GA Group resulted from a strategic reorganization of B. Riley's various valuation and real estate segments into a single entity for streamlined operations.
How much gain is B. Riley expecting from this transaction?
B. Riley anticipates a gain of approximately $235 million in its fourth quarter financial results from the establishment of the GA Group.
Who are the advisors involved in this partnership?
Moelis & Company LLC served as the exclusive financial advisor to B. Riley, while Sullivan & Cromwell LLP provided legal advice, with Wachtell, Lipton, Rosen & Katz advising Oaktree.
What services will the GA Group offer?
The GA Group will offer services in valuation, appraisal, asset disposition, and real estate, all underpinned by decades of industry experience.
