KKR announced it has entered into a definitive agreement to acquire Arctos Partners, the institutional investor known for buying minority stakes in professional sports franchises and for providing structured capital solutions to alternative asset managers.
The deal is initially valued at $1.4 billion, with additional contingent consideration that could materially increase the total value, as KKR looks to expand into sports investing, scale its GP solutions franchise, and build a larger multi-asset secondaries platform.
Arctos, founded in 2019 and headquartered in Dallas, manages approximately $15 billion of assets under management. The firm operates across two primary lines: Arctos Sports, which provides growth and liquidity capital to professional sports franchises, and Arctos Keystone, which provides growth and liquidity solutions to private markets sponsors. KKR framed Arctos as a scaled entrant in sports franchise stakes and a top-tier player in GP solutions, and said the combination will broaden origination and deepen long-duration capital.
KKR said it will form a new investing business, KKR Solutions, to house Arctos’ Sports and Keystone businesses and serve as the platform for the secondaries and solutions franchise KKR intends to build over time. Arctos Managing Partners Ian Charles and Doc O’Connor will join KKR as Partners, and Charles will lead KKR Solutions.
KKR positioned the acquisition as consistent with its strategy of building and acquiring complementary businesses in large addressable markets where it can lead. The firm highlighted sports franchise stakes as an asset class with long-term value appreciation dynamics and growing demand, and noted Arctos’ ability to invest across teams in the major U.S. leagues. KKR also emphasized the continued expansion of the GP solutions market and said Arctos will be able to offer sponsors a broader set of capital solutions with greater flexibility on structure and permanence.
The deal includes an initial consideration mix of cash and KKR equity with multi-year vesting provisions. KKR said the transaction is expected to be accretive on a per-share basis across key financial metrics immediately after closing, subject to customary approvals and conditions, including regulatory review and specified sports league approvals.
KEY QUOTES:
“KKR is a preeminent global investment firm and ideally positioned to help us achieve the vision we have for Arctos. We see tremendous opportunity to better serve the sports industry and the sponsor community, but the key to that unlock is a partnership that will provide access to strategic, financial and operational resources to accelerate our existing businesses. At the same time, we will be able to leverage KKR’s broad range of products and capabilities to extend and enhance our relationships with leagues, teams, GPs and sponsors. Through this transaction, we will become an even stronger partner to the markets and investors that we serve, which has been our goal from the very beginning.”
Ian Charles and Doc O’Connor, Managing Partners, Arctos Partners
“Arctos has created a distinctive and scaled platform across sports investing and capital solutions for asset managers, and the team has extensive experience in secondaries—three areas where we see significant long-term opportunity. The team has complementary strengths, strong cultural alignment, and an entrepreneurial approach that fits well with KKR. We look forward to working together to build a platform that expands opportunities across the entire KKR ecosystem.”
“Ian Charles is one of the most experienced leaders in the secondaries space. We have known Ian for more than a decade and have worked closely with him, including on KKR’s first structured secondaries transaction—a milestone that ultimately laid the foundation for our Health Care and Technology Growth platforms, which today manage over $17 billion of capital. With the team’s track record and history of innovation, we know Arctos is the right partner to help us build a leading franchise across sports, GP solutions and secondaries.”
Joe Bae and Scott Nuttall, Co Chief Executive Officers, KKR
