CVC Acquires Top US Credit Manager Marathon Asset Management

CVC Capital Partners has announced its acquisition of Marathon Asset Management, a prominent US credit manager, in a transaction valued at $1.2 billion. The deal includes a combination of cash and equity, with $400 million being paid upfront in cash and the potential for up to $800 million in CVC equity.

Transaction Overview

The acquisition’s base consideration totals $1.2 billion, comprising:

• $400 million in cash upon closing
• Up to 45 million units of equity issued by a CVC subsidiary, known as SubCo
• Earn-out consideration linked to Marathon’s financial performance from FY2027 to FY2029, possibly reaching an additional $200 million in cash and 11 million SubCo units

Marathon’s minority partner is set to receive $280 million as part of the cash consideration for their complete stake in the firm. The deal underscores a strong alignment in culture and investment philosophy between CVC and Marathon, as articulated by Marathon’s co-founder, Bruce Richards.

Strategic Implications

Bruce Richards emphasized that Marathon’s mission has always been to provide exceptional investment performance through robust origination and disciplined risk management. The merger with CVC is expected to enhance this mission through increased global reach and diverse investment insights.

Following the acquisition, Marathon will be rebranded as CVC-Marathon. Co-founders Bruce Richards and Lou Hanover will continue to lead Marathon’s credit strategies. Richards will join CVC’s Partner Board, alongside Andrew Davies, overseeing the combined CVC Credit division.

Financial Projections

The acquisition is projected to be EPS neutral in 2027 and accretive starting in 2028. This forecast does not account for potential revenue or cost synergies from the merger.

Advisory and Regulatory Considerations

Several financial and legal advisors facilitated the transaction:

• CVC was advised by JP Morgan, Freshfields, Fried Frank, and Ernst & Young.
• Marathon’s advisory was handled by Sidley Austin.

The acquisition is pending regulatory approvals and other consents, with expectations for closure in the third quarter of 2026.

Conclusion

CVC’s acquisition of Marathon Asset Management marks a significant step in expanding its credit management capabilities. With a shared commitment to exceptional investment performance, this partnership aims to leverage both firms’ strengths in a competitive financial landscape.