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Golub Capital sells minority stake to Dyal

  • Golub manages more than $25 bln in capital
  • All proceeds from the sale are staying with Golub
  • Dyal owns stakes in Cerberus, H.I.G., Silver Lake, Vista

Golub Capital, one of the biggest middle market lenders, has become the latest firm to sell a minority stake to Dyal Capital, according to officials.

Financial terms of the deal, which closed Friday, Aug. 3, were not available. Dyal is buying a stake in “the high teens” from Golub, a source said. Dyal’s stake is passive and non-voting. Golub is expected to announce the sale later Friday.

All proceeds from the sale are staying with Golub, which is expected to use the extra capital to grow. A bigger balance sheet will allow Golub to provide larger loans for bigger sponsors, the person said.

The firm, however, will continue serving the middle market, the person said. Founded in 1994, Golub provides financing, with loans valued at between $50 million to $600 million, for middle-market companies and their PE sponsors. It manages more than $25 billion.

In addition to the upper middle market, Golub also plans to do syndications of large one-stop transactions and more senior debt, the person said.

Golub, of New York and Chicago, is owned by its employees. Lawrence Golub is the CEO while his brother, David, is president. None of the owners sold any of their holdings. Instead, the firm issued new equity to fund the sale.

Golub is the latest firm to take part in minority-stake sales. The trend has seen several buyout shops opting to sell slivers of themselves to outside investors.

Dyal, a unit of Neuberger Berman, is the leader in gobbling up GP minority stakes. Dyal has invested in Vector Capital, Cerberus Capital Management, Sound Point Capital, KPS Capital, H.I.G. Capital, Silver Lake and Vista Equity.

Buyouts in May first reported that Golub was seeking to sell a minority stake.

JP Morgan advised Golub.

Dyal could not be reached for comment. JP Morgan declined comment.

Action Item: For more information: https://golubcapital.com/contact-us/