BGC Partners Completes Berkeley Point Acquisition for $875M

9/10/17

BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company servicing the financial and real estate markets, announced today that it has completed the previously announced acquisition of Berkeley Point Financial LLC1 for $875 million.

Management Comments 

Howard W. Lutnick, Chairman and Chief Executive Officer of BGC Partners, said: "We believe that the addition of Berkeley Point will dramatically increase the scale and scope of Newmark.2 We expect the combination of Berkeley Point, a top five GSE multifamily lender, ARA, our top three multifamily capital markets business, and our fast-growing commercial mortgage brokerage business to generate substantial revenue synergies across our businesses.

"We are also pleased to announce our new Credit Agreements. With broad-based support from leading banks, we have financed this transaction, as well as significantly increased BGC's revolver capacity going forward."

Minority Investment in New Real Estate Finance and Investment Business 

BGC has also completed the previously announced investment of $100 million in cash for approximately 27 percent of the capital (the "Company Investment") in a commercial real estate-related finance and investment business along with Cantor Fitzgerald, L.P.3 The Berkeley Point acquisition and the Company Investment (together, the "Transactions") are expected to be immediately accretive to the Company's earnings per share.

Berkeley Point and the Company Investment will be part of BGC's Real Estate Services segment.

Credit Agreements 

In connection with the Transactions, the Company has entered into two credit agreements (the "Credit Agreements") with participating financial institutions. The first Credit Agreement makes available to BGC a $400 million two-year unsecured senior revolving credit facility (the "Revolving Credit Facility"). The second Credit Agreement provides for a $575 million unsecured senior term loan (the "Term Loan Facility") maturing on the second anniversary of the BPF acquisition closing date. The interest rates of the Credit Agreements are LIBOR plus 225 basis points, subject to adjustments based on pricing grids dependent on the Company's credit ratings with Standard & Poor's and Fitch. The Credit Agreements also contain certain other customary financial covenants.

On September 8, 2017, the Company drew $400 million under the Revolving Credit Facility and $575 million under the Term Loan Facility (together, the "Borrowing"). BGC utilized the funds, together with cash on hand, to finance the Transactions, and to pay expenses related to the Transactions and the financing. A portion of the Borrowing was also used to repay in full the outstanding balance of $150 million under the Company's previously existing revolving credit agreement, dated as of February 25, 2016. BGC expects to repay the Borrowing from future financing arrangements, existing financing sources, cash on hand, and/or future equity issuances. The Term Loan Facility is also subject to mandatory prepayment, with 100% of net cash proceeds of all material asset sales and debt and equity issuances, subject to certain customary exceptions.

Bank of America Merrill Lynch acted as the left side joint lead arranger, joint bookrunner and administrative agent for the Credit Agreements. Banks acting as joint lead arrangers, joint bookrunners, and syndication agents are: Goldman Sachs Bank USA; Citigroup Global Markets Inc.; Capital One, N.A.; and PNC Bank, N.A. Additional banks participating in the Credit Agreements are: Mizuho Bank, Ltd. (also a syndication agent); Industrial and Commercial Bank of China Ltd. (also the documentation agent); Stifel Bank & Trust; BMO Harris Bank N.A.; Regions Bank; Associated Bank, N.A.; and BankUnited, N.A.

About BGC Partners, Inc.

BGC Partners is a leading global brokerage company servicing the financial and real estate markets. BGC owns GFI Group Inc., a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets. The Company's Financial Services offerings include fixed income securities, interest rate swaps, foreign exchange, equities, equity derivatives, credit derivatives, commodities, futures, insurance brokerage, and structured products. BGC provides a wide range of services, including trade execution, broker-dealer services, clearing, trade compression, post trade, information, and other services to a broad range of financial and non-financial institutions. Through brands including FENICS, BGC Trader, Capitalab, Lucera, and FENICS Market Data, BGC offers financial technology solutions, market data, and analytics related to numerous financial instruments and markets.

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