BlackRock Inc., the world’s biggest asset manager, said Friday it has entered an agreement to acquire Global Infrastructure Partners, or GIP, an independent infrastructure fund manager, for $3 billion in cash and about 12 million shares.
The infrastructure market is valued at $1 trillion today and expected to be one of the fastest-growing ones in the years ahead, BlackRock
BLK,
said in a statement.
“A number of long-term structural trends support an acceleration in infrastructure investment,” said the asset manager. “These include increasing global demand for upgraded digital infrastructure like fiber broadband, cell towers and data centers; renewed investment in logistical hubs such as airports, railroads and shipping ports as supply chains are rewired; and a movement toward decarbonization and energy security in many parts of the world.”
GIP, which was founded in 2006, has more than $100 billion in assets under management and a strong reputation for driving improvements in portfolio companies, said the statement. The company has about 400 employees and more than 40 portfolio companies that generate more than $75 billion in annual revenue and employ about 115,000 people around the world.
BlackRock intends to fund the cash part of the deal by raising about $3 billion of additional debt.
The deal is expected to modestly boost adjusted EPS and operating margin in the first full year after close, which is expected in the third quarter.
BlackRock announced the deal as it reported fourth-quarter earnings, showing per-share earnings of $9.15, up from $8.29 a year ago, and ahead of the $8.87 FactSet consensus.
Revenue rose to $4.631 billion from $4.337 billion, just below the $4.652 billion FactSet consensus.
Assets under management stood at $10 trillion at year-end, up from $8.6 trillion a year ago. It’s just the second time in the company’s history that it has topped $10 trillion in AUM after doing so in 2021.
The company also raised its quarterly dividend by 2% to $5.10.
The company booked a $61 million charge from a program that aims to reorganize some of its platforms, primarily its portfolio management software platform Aladdin and illiquid alternative investments.
“The strategic re-architecture of our organization will simplify and improve how we work and deliver for clients,” CEO Laurence Fink said in a statement. “And our acquisition of GIP will propel our leadership in the fast-growing market for hard-asset infrastructure.”
BlackRock’s stock is up 5% in the last 12 months, while the S&P 500
SPX,
has gained 20%.
