Ares Agrees to Buy MF Lender Alliant Capital for $63M

CHICAGO—Ares Commercial Real Estate Corp., based here, has agreed to buy multifamily lender Alliant Capital LLC for $62.8 million, in a combination of cash and stock.

Alliant Cos. owned the entity, which was primarily named EF&A Funding LLC. Alliant Cos. also owns Alliant Capital Ltd., a tax credit equity firm for the financing and development of affordable housing, and the latter firm was not included in this sale.

The Alliant Cos. and Alliant Inc. will receive 588,235 shares currently valued at approximately $9.9 million, using Ares’ closing stock price on May 14, plus an additional $52.9 million in cash, subject to certain adjustments. The cash portion of the transaction may be financed through additional debt financing, potential issuances of common or preferred stock and/or the repayment or sale of certain assets.

Ares said it will turn Alliant Capital into a wholly owned taxable REIT subsidiary. Alliant Capital is a financial services company focused on multi-family lending that has developed a significant origination, asset management and servicing platform. Alliant Capital LLC has primarily originated and serviced multifamily loans through the Fannie Mae Delegated Underwriting and Servicing program. As of March 31, Alliant Capital LLC had a servicing portfolio of approximately $3.9 billion in multifamily loans with mortgage servicing rights as of December 31, 2012 at a fair value of approximately $61.0 million.

John Bartling, CEO of Ares, said he expects the transaction will benefit shareholders by being accretive to earnings as revenue synergies follow the advancements of scale. “This highly strategic transaction with Alliant Capital LLC will enable ACRE to better meet the short- and long-term financing needs of multi-family owner/operators in an asset class that has performed well over the long-term, especially in the past five years,” he said in a statement.

The Ares Board of Trustees also announced that Todd Schuster, a current board member, a board member of an affiliate of Alliant Capital LLC, and the founder and former CEO of CW Financial Services from 1991 until 2009, has been appointed to join Bartling as Co-CEO of Ares, effective June 1.

Ares is a specialty finance company that originates, invests in and manages middle-market commercial real estate loans and other commercial real estate investments. The Alliant Cos. is a family of privately owned, fully integrated national finance and investment firms with offices throughout the United States. 

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