Rithm Capital Corp. to Acquire Sculptor Capital Management

Together, Rithm and Sculptor form a strong partnership offering global investors best in class investment capabilities across multiple asset classes.

Rithm Capital to host a conference call today at 8:00 AM ET.

NEW YORK - (BUSINESS WIRE) — Rithm Capital Corp. (NYSE: RITM; “Rithm”), an asset manager focused on the real estate and financial services industries, and Sculptor Capital Management Inc. (NYSE: SCU; “Sculptor”), a global alternative asset manager with $34 billion in assets under management (“AUM”)⁽¹⁾, today announced entry into a definitive agreement under which Rithm will acquire Sculptor in a transaction valued at approximately $639 million⁽²⁾, which includes $11.15 per Class A share of Sculptor.

“This transaction is transformational for Rithm,” said Michael Nierenberg, Chairman, Chief Executive Officer and President of Rithm Capital. “Sculptor’s $34 billion of AUM coupled with Rithm’s $7bn of permanent equity capital and $30+ billion balance sheet creates a world-class asset management business. We are very excited to bring together two organizations with strong track records, excellent management teams, and seasoned investment professionals. Sculptor has a tremendous global investment platform and we believe the combination of both our businesses will continue to deliver great long-term value for shareholders and fund investors alike.”

Sculptor’s investment and leadership teams will continue in their roles and certain members of Sculptor leadership have agreed to vote shares held by them, representing an aggregate of approximately 26% of the outstanding Sculptor voting shares, in favor of the transaction. Upon completion of the transaction, Sculptor will operate as a subsidiary of Rithm and will continue to be led by Jimmy Levin, as CIO and Executive Managing Partner, reporting to Michael Nierenberg, Chief Executive Officer, President, and Chairman of Rithm. Sculptor will continue to operate as is - with an intense focus on delivering risk adjusted returns on the capital with which it has been entrusted.

Jimmy Levin, Chief Investment Officer and Chief Executive Officer of Sculptor, stated “We are extremely pleased about the opportunity to combine with Rithm to capitalize on the growing opportunity set we see in our business. We are excited to leverage this combination to continue to execute on our mission of providing our fund investors with attractive investment returns. We have long sought a partner with the stable capital structure, culture and vision to help unlock the potential for our platform to deliver more and greater value to our fund investors.”

Marcy Engel, Chairperson of Sculptor’s Board of Directors, stated “We are thrilled to deliver a great outcome for Sculptor shareholders and an opportunity for Sculptor to continue to build on its exceptional platform. We look forward to watching the combined company grow its already strong position as a leader in the alternative asset management space.”

Strategic Rationale

• Significantly expands Rithm’s capabilities in the alternative asset management sector:
  ‒ $34 billion of AUM⁽¹⁾ diversified across the real estate, credit and multi- strategy investing spectrum
  ‒ Creates instant scale and broadens Rithm’s product offerings and investment management capabilities
• Combination of complementary platforms creates a compelling partner for investors:
  ‒ Rithm and Sculptor benefit from complementary capabilities, significantly enhancing the transaction potential and benefit to shareholders, fund investors and employees
  ‒ Adds a long-tenured management and investment team to the Rithm platform with a strong track record
• Potential to unlock significant opportunities to grow Sculptor:
  ‒ Provides capital to accelerate growth across sectors
  ‒ Ability to augment existing Sculptor business by seeding new funds and strategies and leveraging existing infrastructure to launch complementary funds
• Attractive transaction for Rithm and Sculptor shareholders:
  ‒ Represents a premium of 18% over the closing price of Sculptor’s Class A shares on July 21, 2023 and a premium of 31% over the unaffected November 17, 2022 closing Class A share price of $8.50⁽³⁾
  ‒ Expected to be neutral to Rithm’s 2024 earnings and accretive in 2025

Key Transaction Details

Rithm will acquire Sculptor in a transaction valued at approximately $639 million⁽²⁾. Sculptor Class A shareholders will receive cash consideration equal to $11.15 per share, with Sculptor operating partnership unitholders receiving the applicable amount of cash consideration in accordance with the Sculptor partnership agreements based on such $11.15 per share price. The parties also expect that, subject to the satisfaction of certain conditions, Sculptor operating partnership Class A / Class A-1 unitholders will be given the opportunity, in lieu of receiving cash consideration, to roll their Sculptor partnership units into partnership units of one or more Rithm subsidiaries. The transaction represents a premium of 18% over the closing price of Sculptor’s Class A shares on July 21, 2023 and a premium of 31% over the unaffected November 17, 2022 closing Class A share price of $8.50⁽³⁾.

The transaction is expected to be funded from Rithm’s cash on hand and available liquidity and is expected to be accretive to Rithm shareholders in 2025.

The Sculptor Board of Directors, acting on the unanimous recommendation of the Special Committee, has unanimously approved the transaction and has recommended that Sculptor shareholders vote to approve it as well. Rithm’s Board of Directors has also unanimously approved the transaction. The transaction is subject to customary closing conditions, including approvals by Sculptor’s shareholders (including the approval by the holders of a majority of the outstanding shares of Class A stock not owned by Class A / A-1 unitholder shareholders or executive managing directors of Sculptor as of July 23, 2023 or the date of Sculptor’s shareholder meeting to approve the transaction), certain regulatory approvals, and the receipt of certain consents. The transaction is expected to close in the fourth quarter of 2023.

Advisors

Citi acted as the exclusive financial advisor to Rithm and Skadden, Arps, Slate, Meagher & Flom LLP and Debevoise & Plimpton LLP served as legal counsel to Rithm. PJT Partners acted as financial advisor and Latham & Watkins LLP acted as legal counsel to Sculptor’s Special Committee. J.P. Morgan Securities LLC acted as financial advisor and Weil, Gotshal & Manges LLP acted as legal counsel to Sculptor.

Investor Presentation

A supplemental investor presentation on the transaction will be available on the Investor Relations | Presentations section of Rithm Capital’s website www.rithmcap.com prior to the conference call.

Conference Call Information

Rithm Capital’s management will host a conference call on July 24, 2023 at 8:00 A.M. Eastern Time. A copy of this press release will be posted to the News section of Rithm Capital’s website, www.rithmcap.com.

All interested parties are welcome to participate on the live call. The conference call may be accessed by dialing 1-833-974-2382 (from within the U.S.) or 1-412-317-5787 (from outside of the U.S.) ten minutes prior to the scheduled start of the call; please reference “Rithm Capital Investor Conference Call.” In addition, participants are encouraged to pre-register for the conference call at https://dpregister.com/sreg/10181375/fa0be896f7.

A simultaneous webcast of the conference call will be available to the public on a listen-only basis in the News | Events section at www.rithmcap.com. Please allow extra time prior to the call to visit the website and download any necessary software required to listen to the internet broadcast.

A telephonic replay of the conference call will also be available two hours following the call’s completion through 11:59 P.M. Eastern Time on July 31, 2023 by dialing 1-877-344-7529 (from within the U.S.) or 1-412-317-0088 (from outside of the U.S.); please reference access code “3587706.”

About Rithm Capital

Rithm Capital is an asset manager focused on the real estate and financial services industries. Rithm Capital’s investments in operating entities include leading origination and servicing platforms held through its wholly-owned subsidiaries, Newrez LLC, Caliber Home Loans Inc., and Genesis Capital LLC, as well as investments in affiliated businesses that provide residential and commercial real estate related services. The Company seeks to provide attractive risk-adjusted returns across interest rate environments. Since inception in 2013, Rithm Capital has delivered approximately $4.7 billion in dividends to shareholders. Rithm Capital is organized and conducts its operations to qualify as a real estate investment trust (REIT) for federal income tax purposes and is headquartered in New York City.

About Sculptor

Sculptor is a leading global alternative asset manager and a specialist in opportunistic investing. For over 25 years, Sculptor has pursued consistent outperformance by building an operating model and culture which balance the ability to act swiftly on market opportunity with rigorous diligence that minimizes risk. Sculptor’s model is driven by a global team that is predominantly home-grown, long tenured and incentivized to put client outcomes first. With offices in New York, London and Hong Kong, Sculptor invests across credit, real estate and multi-strategy platforms in all major geographies. As of July 1, 2023, Sculptor had approximately $34.2 billion in assets under management.