Blackstone to buy GSO for $930 million

Blackstone Group LP will pay as much as $930 million to acquire GSO Capital Partners LP, an alternative asset manager specializing in leveraged finance. The purchase price will include cash and shares of Blackstone that are currently valued at $620 million, in addition to $310 million to be paid over the next five years if GSO hits specific earnings targets. Blackstone, a New York-based private equity firm, also said it would repurchase up to $500 million of its own shares as part of the deal to offset the issuance of new stock for the GSO acquisition. New York-based GSO, with $10 billion in assets under management, was founded in 2005 by three former Credit Suisse Group executives — Bennett Goodman, Dan Ostrover and Tripp Smith — who will manage the combined businesses. Mr. Goodman will join Blackstone's executive committee, the companies said. With the acquisition, Blackstone's alternative asset management business will have more than $21 billion under management. Back in May, Merrill Lynch & Co. Inc. announced that it agreed to purchase a minority stake in GSO for an undisclosed price (InvestmentNews, May 21) .