NEW YORK Blackstone Group LP (BX.N) has agreed to buy the investment unit of real estate finance company Capital Trust Inc CT.N, whose chairman is real estate magnate Sam Zell, and to take an 18.2 percent stake in the company in a deal worth about $30 million, the companies said on Thursday.
Shares of Capital Trust rose 27 percent after hours following the joint statement after closing $3.13 on the New York Stock Exchange.
Blackstone will take over management of CT Investment Management Co LLC, as well as Capital Trust's co-investment in the fund, for $20 million. It also will spend about another $10 million for the equity stake in the company, which Blackstone will manage.
Capital Trust was founded by Zell in 1997. John Klopp, the present co-chief executive and co-chief investment officer at Morgan Stanley Real Estate Fund Inc, was a co-founder. The company invested in mezzanine loans, which help fill the gap between first mortgages and equity.
Like many other structured finance lenders, it was hurt by the real estate downturn and financial crisis.
The Capital Trust management team that includes Chief Executive Officer Stephen Plavin, Chief Financial Officer Geoffrey Jervis and Chief Operating Officer Thomas Ruffing will continue in their current roles.
Capital Trust's board has approved the deal. W.R. Berkley, which has a 17.1 percent stake in Capital Trust, also supports the deal, the companies said.
Evercore Partners served as Capital Trust's financial adviser.
(Reporting By Ilaina Jonas)