GMAC Reaches Agreement to Sell 60 Percent
Stake in Commercial Mortgage Business to KKR,
Five Mile Capital, Goldman Sachs Capital Partners
DETROIT—August 3, 2005—General
Motors Acceptance Corporation (GMAC), the financial
services subsidiary of General Motors Corporation
(NYSE:GM), announced today that it has entered
into a definitive agreement to sell a 60 percent
equity interest in its commercial mortgage subsidiary,
GMAC Commercial Holding Corp. (GMACCH) to an
investor group comprising Kohlberg Kravis Roberts
& Co. (KKR), Five Mile Capital Partners,
and Goldman Sachs Capital Partners.
GMAC will continue to hold a 40 percent equity
interest in GMACCH, a leader in commercial real
estate loan origination, servicing, asset management,
investment management, and technology services.
GMACCH has a loan servicing portfolio of approximately
$250 billion. The Board of Directors of GMACCH
will be composed of individuals from the investor
group, GMAC and GMACCH management. Members of
the current GMACCH management team will also
invest in the company shortly after the transaction
is completed.
In conjunction with the equity sale, GMACCH
will seek to obtain a standalone credit rating
in order to enhance its ability to fund its
operations on an ongoing basis. Under terms
of the transaction, the company will repay all
inter-company loans to GMAC upon the closing
of the transaction, thereby providing GMAC significant
incremental liquidity.
“GMAC continues to see exciting growth
prospects at its commercial mortgage operations,”
said GMAC Chairman Eric Feldstein. “By
partnering with sophisticated and financially
strong investors, we will ensure that adequate
capital is available to GMACCH to sustain its
profitable growth. By retaining a 40 percent
equity interest, GMAC will continue to participate
in the company’s profitability over the
long term.”
GMACCH Chief Executive Officer Robert D. Feller
said, “The acquisition of a majority interest
in GMAC Commercial Holding Corp. by this experienced
investor group represents an extraordinary opportunity
for us to enhance the value of our enterprise.”
KKR, Five Mile Capital Partners, and Goldman
Sachs Capital Partners said in a statement:
“We are very pleased to pursue a transaction
with GMAC that will establish a broad foundation
on which GMACCH can realize substantial future
growth. GMACCH is one of the largest providers
of commercial mortgage loans and related products
and services in the world, and we look forward
to working with management to expand an already
remarkable platform through enhanced access
to the capital markets.”
The agreement is subject to regulatory approvals,
consents and other conditions, and is expected
to close in the fourth quarter of this year.
The GM and GMAC boards of directors have approved
the transaction.
KKR is one of the world's oldest and most experienced
private equity firms specializing in management
buyouts, with offices in New York, Menlo Park,
California and London, England. Over the past
twenty nine years, KKR has invested in more
than 130 transactions with a total value of
US$146 billion. For more information, please
visit www.kkr.com.
Five Mile Capital Partners (“FMCP”)
is an alternative investment management firm
established in 2003 with equity capital under
management of $800 million. The firm was founded
by five professionals, each with over 25 years
of experience in all aspects of mortgage, real
estate and asset-backed finance. The partners
both collectively and individually have built
a number of leading financial franchises and
participated in creating some of the key innovations
in mortgage and real estate capital markets.
For more information, visit www.fivemilecapital.com.
Founded in 1869, Goldman Sachs is one of the
oldest and largest investment banking firms.
Goldman Sachs is also a global leader in private
corporate equity and mezzanine investing. Established
in 1991, the GS Capital Partners Funds are part
of the firm’s Principal Investment Area
in the Merchant Banking Division. Goldman Sachs’
Principal Investment Area has formed 11 investment
vehicles aggregating $26 billion of capital
to date. With $8.5 billion in committed capital,
GS Capital Partners V is the current primary
investment vehicle for Goldman Sachs to make
privately negotiated equity investments.
General Motors Acceptance Corporation and its
subsidiaries, operating under the umbrella GMAC
Financial Services, provide automotive financing,
commercial finance, insurance and mortgage products,
and real estate services, and have a presence
in more than 40 nations. A wholly owned subsidiary
of General Motors since 1919, GMAC has extended
more than $1.3 trillion in credit to finance
more than 158 million vehicles.
GMAC Commercial Holding Corp.’s largest
operating unit is GMAC Commercial Mortgage Corporation
(GMACCM), a premier financial services firm
that serves the needs of borrowers of commercial
real estate debt as well as the providers of
such capital. With a servicing portfolio of
approximately $250 billion, GMACCM is an industry
leader in loan origination, servicing, asset
management, investment management and technology
services. GMACCM provides a variety of financing
products and services, including permanent,
interim, mezzanine and construction lending,
as well as equity capital.
CONTACTS:
Toni Simonetti
For GMAC
212-418-6380
toni.simonetti@gm.com
Ruth Pachman, Molly Morse
Kekst and Company
For KKR
212-521-4800
ruth-pachman@kekst.com
molly-morse@kekst.com
Andrea Raphael
For GS Capital Partners
212-357-0025
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