Equitable Holdings Subsidiary AllianceBernstein to Acquire Global Private Alternatives Manager CarVal Investors

Equitable Holdings, Inc. (the “Company”) (NYSE: EQH) announced today that one of its subsidiaries, AllianceBernstein (NYSE: AB), has entered into an agreement to acquire CarVal Investors L.P. (“CarVal”).

CarVal is an established global private alternatives investment manager with $14.3 billion in AUM¹, primarily focused on opportunistic and distressed credit, renewable energy infrastructure, specialty finance and transportation investments.

The acquisition of CarVal further enhances Equitable Holding’s differentiated business model, which pairs retirement, asset management and affiliated advice. This transaction expands AB’s higher-multiple private markets platform to nearly $50bn in AUM² and elevates AB into a leading private credit provider with direct origination capabilities. Additionally, the Company expects to generate synergies following the acquisition. Equitable will allocate $750 million of General Account assets into CarVal strategies to improve risk adjusted returns to policyholders and CarVal will have access to AB’s global distribution platform.

“Even through periods of market volatility, the strength of our business model and balance sheet gives us the flexibility to execute on our strategy to grow our capital-light businesses and generate returns for both our clients and shareholders,” said Mark Pearson, CEO and President of Equitable Holdings. “The transaction strengthens our business model by further enhancing the profile of our leading asset manager and increases long-term growth, all while maintaining $1.5 billion of cashflows.”

The details of the transaction are as follows:

• AB has announced a definitive agreement to purchase 100% of CarVal for an upfront purchase price of $750 million and a multi-year earnout if certain targets are reached.
• The deal will be funded primarily through the issuance of AB units.
• This efficient deal structure has no impact to EQH capital position or cash flows as higher fee revenue from CarVal offsets the change in EQH’s ownership in AB from 65% to c.62%, with the potential to reach c.60% if the full earnout is paid upon certain targets being reached.
• The deal is neutral to EQH EPS in the short term and accretive thereafter.
• The acquisition is part of the Company’s previously announced strategy to drive increased returns while growing AB’s private markets business through a $10 billion capital commitment, by allocating $750 million of General Account assets to CarVal strategies.

Additionally, the Company’s strong capital position, year-end cash of $1.6 billion at Holdings and the deal structure, which includes a significant portion to be paid through an earnout structure, gives the Company confidence in the transaction in the current market environment. Lastly, CarVal’s differentiated capabilities in distressed credit will provide more opportunities to generate excess returns.