The All Ordinaries Index (ASX: XAO) is up 0.3% today, with plenty of help from one rocketing ASX All Ords stock.
The soaring company in question is Omni Bridgeway Ltd (ASX: OBL), which provides finance for litigation and legal dispute claims.
Omni Bridgeway shares closed yesterday at 96.5 cents. During the Wednesday lunch hour, they changed hands for $1.385 apiece, up 43.5%.
Here's what's grabbing investor interest today.
ASX All Ords stock takes off on $310 million deal
The Omni Bridgeway share price is soaring after the ASX All Ords stock announced it has entered into a framework agreement with funds managed by Ares Management Corp (NYSE: ARES).
The agreement is for the establishment of a continuation fund to acquire OBL's co-investment in 150-plus investments across a range of underlying funds, along with one remaining balance sheet investment (together the Fund 9 assets).
Ares will acquire a 70% interest in Fund 9 for an upfront cash consideration of approximately $310 million. Omni Bridgeway will retain a 30% interest in Fund 9. Ares will receive a preferred return on its 70% interest in Fund 9, while OBL will retain further profit rights on the whole portfolio through its 30% interest.
The ASX All Ords stock likely stoked investor enthusiasm, noting that the upfront payment of $310 million achieves a cash multiple on invested capital (MOIC) of around 3.2 times on Omni Bridgeway-only deployed capital.
What did management say?
Commenting on the deal sending the ASX All Ords stock rocketing today, Omni Bridgeway CEO Raymond van Hulst said, "I am very pleased with this transaction as it delivers on all of our stated strategic objectives at once."
He said those strategic objections include:
- Validating the fair value of the company's book and the quality of its underwriting and valuation methodologies
- Improving the cost coverage rate
- Reducing debt to zero
- Enforcing Omni Bridgeway's position as the leading and institutional-grade funds management platform for legal assets
van Hulst added:
With 35 years of history in legal finance, Omni Bridgeway pioneered the asset class, and I am pleased we continue leading the innovation while legal assets are becoming a more mainstream asset class.
Jan-Paul Kobarg, partner at Ares Management, said:
Leveraging our scale, structuring capabilities and flexible capital base, we are pleased to invest alongside OBL in this innovative structure for the asset class…
We believe this transaction accelerates OBL's transition to a capital light funds management model in a growing asset class where it is a recognised global leader.
With today's intraday gains factored in, the ASX All Ords stock is trading right about where it was 12 months ago.
