Blue Owl Capital merges two BDCs in $1.7 billion deal

Blue Owl Capital Corporation (NYSE: OBDC) and Blue Owl Capital Corporation II announced a merger agreement that will combine two business development companies with approximately 98% overlapping investments, according to a company statement.

Under the agreement, OBDC will serve as the surviving entity in a transaction that increases OBDC's investment portfolio by $1.7 billion to approximately $18.9 billion across 239 portfolio companies. The merger requires OBDC II shareholder approval and is expected to close in the first quarter of 2026.

The exchange ratio for OBDC II shareholders will be determined based on the net asset value per share of both companies and OBDC's market price before closing. If OBDC trades at or below its NAV, shareholders will receive shares based on the NAV ratio. If OBDC trades above NAV, the exchange will be based on market price.

The transaction is projected to generate approximately $5 million in operational cost savings in the first year. Blue Owl Credit Advisors LLC will reimburse 50% of merger-related fees and expenses up to $3 million.

Both companies' boards unanimously approved the transaction following recommendations from their special committees. OBDC's board also approved a new $200 million share repurchase program effective for 18 months.

The combined entity will maintain 80% senior secured investments with 1.3% of investments on non-accrual status. OBDC reported $17.1 billion in investments across 238 companies as of September 30, 2025, while OBDC II held $1.7 billion across 190 companies.

Truist Securities serves as lead financial advisor to OBDC's special committee, while RBC Capital Markets advises OBDC II's special committee. The combined company will continue trading under the OBDC ticker on the New York Stock Exchange.

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