$11.5 Billion AUM Alternative Asset Manager to Reinvest Proceeds and Build
on Proven Model
NEW YORK, March 13 /PRNewswire-FirstCall/ -- Halcyon Asset Management
LLC together with its affiliates ("Halcyon") and Alternative Asset
Management Acquisition Corporation (AMEX: AMV) ("AAMAC") announced today
that Halcyon will access the public equity markets through an acquisition
by AAMAC. Halcyon, founded in 1981, is a leading global alternative asset
management firm with approximately $11.5 billion in assets under
management. The new entity will be called Halcyon Management Inc. ("Halcyon
Management").
The transaction values Halcyon at approximately $974 million. Under the
terms of the agreement, members of Halcyon entities will receive up to $505
million in cash and notes, and will retain LLC interests in Halcyon
exchangeable into shares of AAMAC on a one-for-one basis. The terms also
provide for the ownership of the Halcyon exchangeable interests to be
adjusted upward contingent upon achieving certain stock price targets.
Halcyon members will initially own approximately 43.6% of the fully diluted
ownership interest of the new entity.
Partners of Halcyon entities will further align their interests with
fund investors, reinvesting 75% of the after-tax cash proceeds in Halcyon
funds, typically for three years, at full fees to the public stockholders.
Halcyon's partners will enter into lock-up and non-compete agreements, and
their equity consideration will generally vest over five years.
Halcyon has a diverse investor base including leading public and
private pension funds, endowments, foundations, financial institutions,
insurance companies, funds of hedge funds and high net worth individuals.
It has clients in the United States, Canada, Latin America, the United
Kingdom, Continental Europe, the Middle East, Asia ex-Japan, Japan and
Australia. Halcyon manages multi-strategy funds, as well as additional
strategies focused on off-the-run and difficult-to-source investments,
stressed/distressed and undervalued asset-backed securities, senior secured
bank loans and long/short corporate debt investments.
Halcyon is headquartered in New York, with offices in London and Los
Angeles. It has been registered with the SEC as an investment advisor since
1997, and its London affiliate is authorized by the FSA. Halcyon Asset
Management LLC is privately held and controlled by 11 active partners, who
average 12 years of experience at the firm. Halcyon draws on the skills and
experience of 119 employees, 50 of whom are investment professionals.
"We believe this transaction, first and foremost, will benefit our
investors. It will enhance our ability to attract and retain the best
talent in the business, ensuring our continued ability to build on our
track record by having the right people for the right strategies at the
right time," said John Bader, Co-Chairman of Halcyon Asset Management LLC.
"It will give us a currency for further growth, which will help us motivate
employees and support our recruiting efforts. Our reinvestment of the
proceeds will further strengthen our alignment of interests with fund
investors."
"This transaction accomplishes AAMAC's stated IPO objective: to find an
alternative asset management firm that has a long track record of success,"
said Michael Levitt, current Chairman of AAMAC. "Halcyon has proven through
its growth that it has the history, scale, investment and risk management
processes, operational infrastructure and capacity to attract large
institutional investors. We particularly like its affiliate business model,
under which in the last three years it has launched three hedge fund
strategies with assets now aggregating over $2 billion. We believe this
transaction benefits all parties involved as it allows Halcyon to access
the public market and further achieve its strategic objectives at an
attractive valuation for AAMAC public shareholders. Based on average
historical net returns of Halcyon funds, historical Halcyon hedge fund AUM
growth and Halcyon's management fee run-rate as of December 31, 2007, the
multiple of earnings power at the trust value of $9.76 per share is
approximately 9.5 times."
Mr. Bader continued, "Halcyon's structure, in which employees will be
paid primarily through a share of performance fees and our public
shareholders will generally receive all of our management fees, will give
investors in the stock the ability to participate in the growth and
institutionalization of the hedge fund industry with limited exposure to
performance variability. The structure also allows us to retain the
attractiveness of our partnership model and culture."
Upon consummation of the transaction, John Bader will become Chairman
and Chief Executive Officer of Halcyon Management, Kevah Konner and Steven
Mandis will each become Vice Chairman and Tom Hirschfeld will become
President. All current management members of the Halcyon management team
will remain with the company.
To finance the acquisition, AAMAC will use the:
-- cash held in trust of approximately $390 million assuming no
conversions and excluding deferred underwriting fees;
-- issuance of a note in the amount of $115 million, subject to adjustment
in certain circumstances;
In addition, the Halcyon equity holders will retain 46.9 million LLC
interests in Halcyon that will be exchangeable on a one-for-one basis into
Halcyon Management common stock, which was valued at $469 million. In
addition, the Halcyon equity holders will be eligible to receive up to an
additional 26.6 million exchangeable LLC interests, which will be issued in
equal amounts upon achievement of each dollar of stock price from $15 to
$20.
The transaction is expected to be completed during the third quarter
2008, pending AAMAC stockholder approval, Halcyon client consent,
regulatory approval, and other customary closing conditions. The parties
intend to seek listing of Halcyon Management's shares to trade on the New
York Stock Exchange following the closing.
Separately, Halcyon announced that it recently completed the sale of an
affiliate, which had assets under management of $2.2 billion.
Goldman Sachs is serving as exclusive financial advisor to Halcyon, and
Citi is serving as exclusive financial advisor to AAMAC. Jefferies Putnam
Lovell, the division of Jefferies Group, Inc. (NYSE: JEF) provided an
opinion to the AAMAC Board that the transaction was fair to AAMAC from a
financial point of view. Legal counsel to Halcyon is Wachtell, Lipton,
Rosen and Katz, while legal counsel to AAMAC is Akin Gump Strauss Hauer
Feld LLP.
Certain additional information, including historical financial
information and data on Halcyon, such as assets under management (AUM),
performance track record and AUM growth rates, will be contained in a
management presentation which will be made public and filed later today by
AAMAC with the U.S. Securities and Exchange Commission (SEC).
Investor/Analyst Presentation--Conference Call and Webcast
Halcyon and AAMAC will host a conference call today at 8 a.m. Eastern
Time (ET) to discuss the proposed transaction. The call will be open to the
public. All interested parties who would like to listen to the call should
dial 1-800-291-9234 (within the U.S.) or 1-617-614-3923 (outside the U.S.)
10 minutes prior to the scheduled start of the call (participant passcode:
23059068). A simultaneous webcast of the call also will be available to the
public on a listen-only basis through Halcyon's Web site at
http://www.halcyonllc.com. The slides complementary to the presentation are
available at the SEC website (http://www.sec.gov) as part of today's AAMAC 8-K
filing.
For those unable to listen to the live broadcast, a replay will be
available at the same Web address or by dialing 1-888-286-8010 (within the
U.S.) or 1-617-801-6888 (outside the U.S.) approximately two hours after
the event (replay participant passcode: 31016532).
About Halcyon
Founded in 1981, Halcyon is a leading global multi-strategy investment
firm, managing approximately $11.5 billion in assets for a diverse group of
investors including leading public and private pension funds, endowments,
foundations, financial institutions, insurance companies, funds of hedge
funds and high net worth individuals. Halcyon is registered with the SEC
and the U.K. Financial Services Authority and has clients in the United
States, Canada, Latin America, the United Kingdom, Continental Europe, the
Middle East, Asia ex-Japan, Japan and Australia. For more information on
Halcyon see http://www.halcyonllc.com.
About Alternative Asset Management Acquisition Corporation
Alternative Asset Management Acquisition Corporation ("AAMAC") is a
blank check company which was formed in 2007 for the purpose of acquiring
through a merger, capital stock exchange, asset acquisition, stock
purchase, reorganization or similar business combination one or more
businesses or assets in the alternative asset management sector or a
related business. It currently has no operating businesses.
Additional Information About the Transaction and Where to Find It
AAMAC intends to file with the Securities and Exchange Commission
("SEC") a preliminary proxy statement in connection with the proposed
transaction and to mail a definitive proxy statement and other relevant
documents to AAMAC stockholders. Stockholders of AAMAC and other interested
persons are advised to read, when available, AAMAC's preliminary proxy
statement, and amendments thereto, and the definitive proxy statement in
connection with AAMAC's solicitation of proxies for the special meeting to
be held to approve the transaction because the proxy statement will contain
important information about AAMAC, Halcyon and the proposed transaction.
The definitive proxy statement will be mailed to stockholders as of a
record date to be established for voting on the transaction. Stockholders
will also be able to obtain a copy of the preliminary and definitive proxy
statements, without charge, once available, at the SEC's Internet site at
http://www.sec.gov or by directing a request to: AAMAC, 590 Madison Avenue,
35th Floor, New York, New York 10022, telephone: 212-409-2434.
Nothing in this press release should be construed as, or is intended to
be a solicitation for or an offer by, on behalf of AAMAC or Halcyon, of any
securities or investment advisory services.
Participants in the Solicitation
AAMAC and its directors and its officers may be deemed participants in
the solicitation of proxies from AAMAC's stockholders. A list of the names
of those directors and the officers and descriptions of their interests in
AAMAC is contained in AAMAC's prospectus dated August 1, 2007, which is
filed with the SEC, and will also be contained in AAMAC's proxy statement
when it becomes available. More detailed information regarding the identity
of potential participants and their direct or indirect interests, by
securities holdings or otherwise, will be set forth in the proxy statement
and other materials to be filed with the SEC in connection with the
proposed transaction.
Forward-looking Statements
This press release includes "forward-looking statements" within the
meaning of the safe harbor provisions of the United States Private
Securities Litigation Reform Act of 1995. Words such as "expect,"
"estimate," "project," "budget," "forecast," "anticipate," "intend,"
"plan," "may," "will," "could," "should," "believes," "predicts,"
"potential," "continue," and similar expressions are intended to identify
such forward-looking statements. Forward-looking statements in this press
release include matters that involve known and unknown risks, uncertainties
and other factors that may cause actual results, levels of activity,
performance or achievements to differ materially from results expressed or
implied by this press release. Such risk factors include, among others:
uncertainties as to the timing of the acquisition and the ability to obtain
financing; approval of the transaction by AAMAC stockholders; the
satisfaction of closing conditions to the transaction, including the
receipt of regulatory approvals; costs related to the acquisition; the
competitive environment in the asset management industry; the diversion of
management time on acquisition related issues; general economic conditions
such as inflation or recession; operating Halcyon as a public company;
market conditions for Halcyon managed investment funds; and the performance
of Halcyon managed investment funds; the inability to maintain growth rates
of assets under management; the related management and performance fees and
the related impact on revenue, net income and fund inflows/outflows. Actual
results may differ materially from those contained in the forward-looking
statements in this press release. AAMAC and Halcyon undertake no obligation
and do not intend to update these forward-looking statements to reflect
events or circumstances occurring after the date of this press release. You
are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release. All
forward-looking statements are qualified in their entirety by this
cautionary statement.
SOURCE Halcyon Asset Management LLC
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Related links:
http://www.halcyonllc.com
CONTACT:
Steven Bruce, Mary Beth Grover, Ann Taylor
Reed, +1-212-371-5999, all of The Abernathy MacGregor Group, for
Halcyon Asset Management LLC
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