Boston Omaha Asset Management, LLC, a Wholly Owned Subsidiary of Boston Omaha Corporation, Acquires 100% Ownership Interest in 24th Street Asset Management, LLC
01 Maio 2023 - 5:42PM
Business Wire
– BOAM increases ownership interest in 24th Street Asset
Management, LLC from 48% to 100%.
Boston Omaha Asset Management, LLC (“BOAM”), a wholly-owned subsidiary of Boston Omaha
Corporation (NYSE:BOC) (“BOC” or the
“Company”) has acquired the remaining
ownership interest in 24th Street Asset Management, LLC
(“24th Street”). Prior to the
acquisition, BOAM owned a 48% beneficial interest in 24th Street.
24th Street serves as the general partner of two funds and several
joint ventures, which invest via equity and debt in commercial real
estate assets.
BOAM and Brendan Keating raised 24th Street’s first fund in Q1
2020. As of December 31, 2022, 24th Street has approximately $123
million of assets under management, inclusive of two closed-end
funds and multiple joint ventures. Mr. Keating, along with Adam
Peterson and Alex Rozek, BOC’s Co-Chief Executive Officers, serve
as the Co-Managing Directors of BOAM.
Adam Peterson, BOC’s Co-Chief Executive Officer, commented on
the acquisition of the remaining membership interests in 24th
Street not previously owned by BOAM by noting that "This
acquisition brings commercial real estate asset management
activities, which has a track record spanning over a decade, under
the BOAM umbrella. We could not be more excited to have Brendan on
board, full-time, using all of his energy to build value for BOC
shareholders. BOAM now has two verticals in which it manages funds
as a wholly-owned-by-BOC general partner, commercial real estate
with the acquisition of 24th Street and our BFR fund focused on
purpose built residential rentals. We continue to believe BOAM can
be an excellent source of raising capital next to our own capital
at BOC, when new investment ideas exceed the size of our balance
sheet or should be structured in a specific manner. The building of
BOAM within BOC offers the opportunity for tremendous value
creation for BOC shareholders in the long-term.”
Brendan Keating noted that “it immediately made sense when Adam
and Alex approached me about BOAM acquiring the remaining
membership interests in 24th Street. In any business I am involved
in, I always seek alignment of interest, and this sale gets the
team under one roof. Nothing will change in our day to day
management of the current funds under management. But what I
believe will change is having all of our efforts pulling in the
same direction each day, for the benefit of BOC shareholders. While
we are excited about the sale, our philosophy is “head down and
keep grinding” in an effort to produce favorable investment results
for our partners and for BOC.”
Mr. Keating further noted that nothing is expected to change in
the operations of 24th Street, but for the name. The new division
will now be referred to as Boston Omaha Commercial Real Estate.
Agus Alamsjah, who has worked with Mr. Keating since July 2014,
will also be working full-time at BOAM as Director of Commercial
Real Estate.
The aggregate purchase price paid to the sellers named in the
MIPA (the “Sellers”) consists of
$2,759,072 in cash at closing, an additional $1,254,102 in cash
subject to holdback (the “Holdback
Amount”), and an aggregate of 45,644 shares of BOC Class A
common stock (the “BOC Shares”). The
BOC Shares issued in the transaction are unregistered and have no
registration rights. The Holdback Amount is subject to release if
distributions paid to 24th Street pursuant to 24th Street’s gross
profits interest (carried interest) held in certain entities
(collectively, the “Funds”), minus
certain compensation bonuses payable (such net amount, the
“Net Promote Amount”), exceed
$7,226,672 but are less than or equal to $9,635,562 (the
“Earn-Out Threshold”). If
the Net Promote Amount exceeds the Earn-Out Threshold, the Sellers
will receive 25% of the amount of such excess until the Funds are
liquidated or dissolved at which point the Sellers’ right to any
Earn-out Payment shall extinguish and the Holdback shall
expire.
The three members of BOC’s Audit and Risk Committee reviewed and
unanimously approved the transaction as the transaction involves
Mr. Keating, a director of BOC and a co-managing director of BOAM,
who beneficially owned 92% of the 24th Street membership interests
that were sold by the Sellers to BOAM in this transaction.
Forward-Looking Statements
Any statements in this press release about the Company’s future
expectations, plans and prospects, including statements about our
financing strategy, future operations, future financial position
and results, market growth, total revenue, as well as other
statements containing the words “anticipate,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intend,” “may,”
“might,” “plan,” “potential,” “predict,” “project,” “should,”
“target,” “will,” or “would” and similar expressions, constitute
forward-looking statements within the meaning of the safe harbor
provisions of The Private Securities Litigation Reform Act of 1995.
The Company may not actually achieve the plans, intentions or
expectations disclosed in the Company’s forward-looking statements,
and you should not place undue reliance on the Company’s
forward-looking statements. Actual results or events could differ
materially from the plans, intentions and expectations disclosed in
the forward-looking statements the Company make as a result of a
variety of risks and uncertainties, including risks related to the
Company’s estimates regarding the potential market opportunity for
the Company’s current and future products and services, the impact
of the COVID-19 pandemic, the competitive nature of the industries
in which we conduct our business, general business and economic
conditions, our ability to acquire suitable businesses, our ability
to successfully integrate acquired businesses, the effect of a loss
of, or financial distress of, any reinsurance company which
reinsures the Company’s insurance operations, the risks associated
with our investments in both publicly traded securities and
privately held businesses, our history of losses and ability to
maintain profitability in the future, the Company’s expectations
regarding the Company’s sales, expenses, gross margins and other
results of operations, and the other risks and uncertainties
described in the “Risk Factors” sections of the Company’s public
filings with the Securities and Exchange Commission (the “SEC”) on
Form 10-K for the year ended December 31, 2022, as well as other
risks and uncertainties which may be described in any subsequent
quarterly report on Form 10-Q filed by the Company and the other
reports the Company files with the SEC. Copies of our SEC filings
are available on our website at www.bostonomaha.com. In addition,
the forward-looking statements included in this press release
represent the Company’s views as of the date hereof. The Company
anticipates that general economic conditions and subsequent events
and developments may cause the Company’s views to change. However,
while the Company may elect to update these forward-looking
statements at some point in the future, the Company specifically
disclaims any obligation to do so. These forward-looking statements
should not be relied upon as representing the Company’s views as of
any date subsequent to the date hereof.
24th Street is an independent investment advisor registered with
the State of Nevada. More information about 24th Street including
its investment strategies, fees, and objectives can be found in its
ADV Part 2, which is available upon request.
Our investor relations website is
https://investor.bostonomaha.com/
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Mark Burgers 402-403-3771 contact@bostonomaha.com
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