NEW YORK & MEXICO CITY - Ares Management Corporation (NYSE:ARES), a global alternative investment manager, has announced the acquisition of Walton Street Capital Mexico and certain affiliates, a prominent real estate asset management company with a focus on the industrial sector. The deal involves assets under management worth approximately $2.1 billion as of June 30, 2024.
The acquisition is set to be completed in the fourth quarter of 2024, subject to regulatory approvals and customary closing conditions. It is expected to be immediately accretive to Ares' after-tax realized income per share of Class A and non-voting common stock.
Walton Street Mexico, led by Federico Martin del Campo, has a 20-year track record in the industrial real estate market in Mexico, with more than 51 million square feet of industrial space across over 250 properties. The team's expertise is anticipated to complement Ares Real Estate's existing portfolio, which includes $28.1 billion in industrial assets and over 230 million square feet across the U.S. and Europe.
Michael Arougheti, CEO and President of Ares, expressed enthusiasm for the transaction, highlighting the strategic alignment and the potential for Mexico to become an increasingly attractive location for manufacturing and warehouse space demand. David Roth, Co-Head of Ares U.S. Real Estate, also emphasized the strategic growth of Ares' industrial platform and the opportunity presented by the Mexican market.
On the Walton Street side, Jeff Quicksilver, Co-Founder and Managing Partner, praised the development of Walton Street Mexico into a leading private equity real estate manager in Mexico and mentioned the strategic timing of the sale to focus on U.S. real estate equity and debt investment platforms.
Legal counsel for the transaction was provided by Latham & Watkins LLP for Ares and Kirkland & Ellis LLP and Mayer Brown LLP for Walton Street. Financial advisory services were conducted by Berkshire Global Advisors L.P. for Walton Street.
Ares Management Corporation, with over $447 billion of assets under management as of June 30, 2024, operates across North America, Europe, Asia Pacific, and the Middle East. Walton Street Capital, L.L.C., with a history dating back to 1994, has raised more than $15 billion of capital commitments and has been active in the Mexican real estate industry since 1998.
This news is based on a press release statement and contains forward-looking statements regarding the future events and performance of Ares Management Corporation and the anticipated benefits of the acquisition.
In other recent news, Ares Management has received an increased price target of $170 from CFRA, a prominent financial research firm, reflecting a positive outlook based on the expansion of the private credit market. The company also reported an 18% year-over-year increase in total assets under management (AUM), reaching $447.2 billion in the second quarter of 2024. Additionally, Ares Management announced a third-quarter common dividend of $0.93 per share, a 21% increase from the previous year.
The National Football League (NFL) has approved private equity firms, including Ares Management, to acquire up to 10% stakes in its teams. This decision marks a significant shift in the NFL's traditional ownership structure. Ares Management has also been the subject of recent analyst attention, with Redburn-Atlantic initiating coverage with a Neutral rating and TD Cowen raising its price target from $158.00 to $162.00.
In company news, Automated Industrial Robotics Inc. (AIR) expanded its global reach through the acquisition of UK-based Sewtec Automation, a move funded primarily by an investment from a private equity fund managed by Ares Management. Furthermore, Hyatt Hotels (NYSE:H) Corporation sold the Hyatt Regency Orlando and an adjacent land parcel for approximately $1.07 billion to RIDA Development Corporation and an Ares Management Real Estate fund. These recent developments highlight the strategic moves of Ares Management, reflecting their ongoing efforts to optimize operations and generate value.
InvestingPro Insights
In light of Ares Management Corporation's (NYSE:ARES) recent acquisition of Walton Street Capital Mexico, investors may be keen to understand the company's financial health and market position. According to InvestingPro data, Ares boasts a substantial market capitalization of $48.83 billion, reflecting its significant presence in the investment management sector.
However, the company's valuation metrics suggest a premium price tag. Ares is currently trading at a high P/E ratio of 79.02, with an adjusted P/E ratio for the last twelve months as of Q2 2024 sitting at 104.98. This is indicative of high investor expectations for future earnings growth, despite the company's revenue declining by 11.64% over the same period. Additionally, the Price / Book ratio stands at 24.4, which may raise concerns about overvaluation relative to the company's book value.
Regarding shareholder returns, an InvestingPro Tip highlights Ares' commendable track record of raising its dividend for 4 consecutive years, with a notable dividend growth of 20.78% in the last twelve months as of Q2 2024. This consistent performance is further underscored by the company maintaining dividend payments for 11 consecutive years, showcasing a commitment to returning value to shareholders.
For investors seeking more in-depth analysis, InvestingPro offers additional tips on Ares Management Corporation, which can be found at InvestingPro ARES. With 14 more InvestingPro Tips available, users can gain a comprehensive understanding of the company's financial outlook and potential investment opportunities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.