BGC Partners Completes Acquisition of Berkeley Point for $875 million.

BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners”, “BGC”, or the “Company”), a leading global brokerage company servicing the financial and real estate markets, announced today that it has completed the previously announced acquisition of Berkeley Point Financial LLC1 for $875 million.

Management Comments
Howard W. Lutnick, Chairman and Chief Executive Officer of BGC Partners, said: “We believe that the addition of Berkeley Point will dramatically increase the scale and scope of Newmark.2 We expect the combination of Berkeley Point, a top five GSE multifamily lender, ARA, our top three multifamily capital markets business, and our fast-growing commercial mortgage brokerage business to generate substantial revenue synergies across our businesses.

“We are also pleased to announce our new Credit Agreements. With broad-based support from leading banks, we have financed this transaction, as well as significantly increased BGC’s revolver capacity going forward.”
Minority Investment in New Real Estate Finance and Investment Business
BGC has also completed the previously announced investment of $100 million in cash for approximately 27 percent of the capital (the “Company Investment”) in a commercial real estate-related finance and investment business along with Cantor Fitzgerald, L.P.3 The Berkeley Point acquisition and the Company Investment (together, the “Transactions”) are expected to be immediately accretive to the Company’s earnings per share.
Berkeley Point and the Company Investment will be part of BGC’s Real Estate Services segment.

Credit Agreements
In connection with the Transactions, the Company has entered into two credit agreements (the “Credit Agreements”) with participating financial institutions. The first Credit Agreement makes available to BGC a $400 million two-year unsecured senior revolving credit facility (the “Revolving Credit Facility”). The second Credit Agreement provides for a $575 million unsecured senior term loan (the “Term Loan Facility”) maturing on the second anniversary of the BPF acquisition closing date. The interest rates of the Credit Agreements are LIBOR plus 225 basis points, subject to adjustments based on pricing grids dependent on the Company’s credit ratings with Standard & Poor’sand Fitch. The Credit Agreements also contain certain other customary financial covenants.

On September 8, 2017, the Company drew $400 million under the Revolving Credit Facility and $575 million under the Term Loan Facility (together, the “Borrowing”). BGC utilized the funds, together with cash on hand, to finance the Transactions, and to pay expenses related to the Transactions and the financing. A portion of the Borrowing was also used to repay in full the outstanding balance of $150 million under the Company’s previously existing revolving credit agreement, dated as of February 25, 2016. BGC expects to repay the Borrowing from future financing arrangements, existing financing sources, cash on hand, and/or future equity issuances. The Term Loan Facility is also subject to mandatory prepayment, with 100% of net cash proceeds of all material asset sales and debt and equity issuances, subject to certain customary exceptions.

Bank of America Merrill Lynch acted as the left side joint lead arranger, joint bookrunner and administrative agent for the Credit Agreements. Banks acting as joint lead arrangers, joint bookrunners, and syndication agents are: Goldman Sachs Bank USA; Citigroup Global Markets Inc.; Capital One, N.A.; and PNC Bank, N.A. Additional banks participating in the Credit Agreements are: Mizuho Bank, Ltd. (also a syndication agent); Industrial and Commercial Bank of China Ltd. (also the documentation agent); Stifel Bank & Trust; BMO Harris Bank N.A.; Regions Bank; Associated Bank, N.A.; and BankUnited, N.A.

Additional Information
See the Company’s press release and investor presentation, both dated July 18, 2017, as well as BGC’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on July 21, 2017 for previously disclosed information about the Transactions. Additional information about the Transactions and the Credit Agreements will be included in SEC filings expected to be made by BGC in the next few days. All of this information will be available at ir.bgcpartners.com.

Sandler O’Neill & Partners, L.P. served as financial advisor to the Special Committee of the Board of Directors of BGC (consisting of all four of BGC’s independent directors) in connection with the Transactions, and Debevoise & Plimpton LLP served as legal advisor to the Special Committee. Cantor Fitzgerald & Co. served as Cantor’s financial advisor in connection with the Transactions, and Wachtell, Lipton, Rosen & Katz served as Cantor’s legal advisor.
 

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