Investor Group Completes Acquisition of Majority
Stake in GMAC Commercial Holding Corp.
GMACCH changes its name to Capmark Financial
Group Inc.
GMAC cash proceeds to total almost $9 billion
after debt repayment
DETROIT – March 23, 2006
– An investor group led by affiliates
of Kohlberg Kravis Roberts & Co. (KKR),
Five Mile Capital Partners, LLC, and Goldman
Sachs Capital Partners has completed the acquisition
of a majority interest in GMAC Commercial Holding
Corp. (GMACCH) from General Motors Acceptance
Corporation (GMAC).
GMAC, the wholly-owned financial services subsidiary
of General Motors Corporation (GM: NYSE), sold
78 percent of its equity in GMACCH, up from
the previously announced 60 percent target,
in exchange for more than $1.5 billion in cash.
At the closing, GMACCH also repaid to GMAC approximately
$7.3 billion of inter-company loans, bringing
GMAC’s total cash proceeds from the transaction
to almost $9 billion.
GMACCH, a leader in real estate finance, investments
and services announced that it has changed its
name to Capmark Financial Group Inc. (Capmark).
The name change will be fully implemented in
the second quarter of this year.
Simultaneous with the equity interest sale,
Capmark closed with a syndicate of banks on
a $10.75 billion loan facility that will provide
the company with a solid intermediate and long-term
debt funding base.
“This is an exciting time for our company,
and we have a great deal to celebrate,”
said Capmark Chief Executive Officer Robert
D. Feller. “With investment-grade ratings
from the three primary rating agencies and enhanced
access to the capital markets, Capmark is poised
to fully realize the opportunities that exist
for each of its businesses.”
GMAC Chairman Eric A. Feldstein said, “GMAC
is optimistic about the growth prospects for
Capmark. With improved access to cost-efficient
funding, this commercial mortgage business should
continue to thrive. We are expecting strong
returns on the significant investment that GMAC
will retain in this business. At the same time,
this transaction will enable GMAC to redeploy
a significant amount of capital – almost
$9 billion – to other critical areas of
our business.”
Concurrent with the closing of the sale, the
percentage of ownership interest of both the
investor group and GMAC has been reduced proportionately
by the sale of shares to members of Capmark’s
management team, who have acquired an equity
stake of approximately four percent. With the
management team’s investment, the investor
group holds a majority interest of approximately
75 percent, while GMAC retains a common equity
stake of approximately 21 percent. GMAC also
will invest an additional $250 million in Capmark
trust preferred stock.
Capmark’s board of directors will be
led by newly appointed independent Chairman
Dennis Dammerman, a former vice chairman of
General Electric and chairman and chief executive
officer of GE Capital Corp. GMAC will hold two
seats on Capmark’s 15-member board, which
includes three independent directors.
“I am very pleased to serve as chairman
of the board of directors of Capmark,”
said Dammerman. “With increased access
to capital, a new name and investment-grade
ratings, the company can build on its many strengths,
drive profitability and enhance the value of
the enterprise.”
KKR, Five Mile Capital Partners and Goldman
Sachs Capital Partners said in a joint statement,
“As a global leader in each of its businesses,
Capmark is very well positioned to begin its
next chapter as a standalone company. We look
forward to working with the management team
to realize the company’s full potential
by making use of the wide range of funding options
now available to Capmark.”
About Capmark:
Capmark Financial Group Inc. (Capmark) is an
industry leader in real estate finance, investments
and services. Capmark’s real estate lending
and origination platform has access to multiple
capital sources. The company is a direct lender,
a correspondent for life insurance companies
and pension funds and one of the leading approved
lenders for FHA, Fannie Mae and Freddie Mac.
In 2005, Capmark’s originations were $29.9
billion.
Capmark’s funds and investment management
platform is a highly respected manager of equity
real estate and mortgage-related investments
in the public and private markets with $10.8
billion in investments under management and
supervision.
With a portfolio of approximately $276 billion,
Capmark is one of the industry’s leading
loan servicers.
The diverse real estate finance, investments
and services company has more than 100 offices
and operations in North American, Asia and Europe.
For more information, visit www.gmaccm.com.
About KKR:
KKR is one of the world's oldest and most experienced
private equity firms specializing in management
buyouts. Founded in 1976, it has offices in
New York, Menlo Park, Calif., London, Paris,
Hong Kong and Tokyo. Over the past 30 years,
KKR has invested in more than 140 transactions
with a total value of US$185 billion. For more
information, please visit www.kkr.com.
About Five Mile Capital Partners:
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.
About Goldman Sachs:
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.
About GMAC:
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 $1.4 trillion in credit to finance
more than 162 million vehicles.
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