Ares Management, L.P. announced on Jun.5 that it has expanded into the commercial finance sector through its acquisition of Keltic Financial Services LLC and Keltic Financial Partners II, LP, a leading commercial finance company that provides asset-based loans to small and middle-market companies.
As part of the transaction, Ares acquired Keltic’s existing loan portfolio, which comprises approximately $155 million of commitments, and formed Ares Commercial Finance within Ares’ Direct Lending Group. Ares Commercial Finance will be based in New York and will combine Keltic’s disciplined asset-based lending philosophy with Ares’ significant capital strength and deep origination capabilities resulting in a one stop asset-based lender for small- and middle-market companies throughout the United States. Ares Commercial Finance expects to provide asset-based credit facilities ranging from $1 million to $30 million.
“The acquisition of Keltic expands Ares’ leading Direct Lending Group into the large and growing asset based lending market with a strong management team that has generated attractive risk adjusted returns for more than 15 years,” commented Mitchell Goldstein, a Senior Partner in Ares Direct Lending Group. “We are very pleased to welcome Jack Reilly, Jamie Franz, Oleh Szczupak and the entire Keltic team as we believe their expertise in asset-based lending will be highly complementary to our leading capabilities in direct lending, allowing us to grow meaningfully in this sector.”
"We believe Ares’ broad direct origination capabilities will greatly improve our deal sourcing and underwriting capabilities,” commented Jack Reilly, who has joined Ares as a Partner in the Direct Lending Group. “We believe the strong credit culture, broad investment platform and significant resources at Ares will enable us to provide comprehensive commercial finance solutions to the large and underserved commercial finance segment of the small and middle market.”
“The expansion of our Direct Lending Group into attractive new subsectors of the small- and middle-market continues to be a meaningful part of our growth strategy,” commented Michael Arougheti, President of Ares. “We see the acquisition of Keltic as an appealing market opportunity to execute on this strategy.”
Ares is a leading global asset manager with approximately $74 billion of assets under management and approximately 700 employees in more than 15 offices in the United States, Europe and Asia as of December 31, 2013. Since its inception in 1997, Ares has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares believes each of its four distinct but complementary investment groups in Tradable Credit, Direct Lending, Private Equity and Real Estate is a market leader based on assets under management and investment performance.
Editor’s Note: ABL Advisor has learned that Houlihan Lokey’s Financial Institutions Group served as exclusive financial advisor to Keltic Financial Services, LLC.
See also: Wells Fargo Capital Finance Agents $150MM Ares/Keltic Acquisition Deal