According to a report by Bloomberg Starwood Property Trust, Inc. (NYSE: STWD) agreed to buy a General Electric Co. (NYSE: GE) energy-finance business for $2.56 billion to expand beyond real estate holdings. In more detail, the acquisition will include about $2.1 billion portfolio of 51 loans backed by various assets including pipelines, power plants and wind farms. In addition, a $400 million of unfunded commitments also included.
Both companies confirmed Bloomberg's report Wednesday in separate statements. In a press release, Alec Burger, President of GE Capital, said, “The sale of the Project Finance Debt Business is aligned to GE Capital’s overall balance sheet reduction efforts and reflects progress against our strategy announced in January 2018. The business is highly complementary to the Starwood Property Trust platform, which has deployed over $44 billion of capital since its inception in 2009 and has vast lending experience across diversified assets and geographies.”
The team transferring to Starwood Property Trust is made up of approximately 20 investment professionals dedicated to the business, primarily in originations & syndications and underwriting & portfolio management.
The completion of the acquisition is subject to customary conditions and is expected to close in the third quarter of 2018. Citigroup Global Markets Inc. provided financial advice and Shearman & Sterling LLP provided legal advice to GE Capital.