ORIX USA today announced the acquisition of Boston Financial Investment Management LP (“Boston Financial”). ORIX USA signed a definitive agreement to acquire Boston Financial on April 28, 2016, and completed the transaction last week. The acquisition combines the financial strength and innovative capital solutions of ORIX USA with Boston Financial Investment Management’s 47-year history and track record as one of the largest syndicators in the Low Income Housing Tax Credit (LIHTC) industry.
“This acquisition is a natural extension of ORIX USA’s existing business and affirms our commitment to the affordable housing market,” said Hideto Nishitani, ORIX USA’s Chairman, President and CEO. “ORIX USA is already active in the affordable housing industry through our investment in RED Capital Group and has established expertise in underwriting, construction management and asset management through our Risk Management and Real Estate groups. With its seasoned management team, Boston Financial is a national leader in the tax credit industry having raised over $10 billion of low-income housing and historic tax credit equity investments in over 2,200 properties. Combining our real estate and affordable housing expertise and deep capital resources with Boston Financial’s track record will strengthen Boston Financial’s position as one of the strongest independent syndicators in the market.”
“Our two companies complement each other very well,” said Boston Financial CEO Ken Cutillo. “Our firm and ORIX USA share many of the same core values of exceptional client service, creativity and integrity. We also share a commitment to address the housing affordability issue that exists in so many towns and cities in America. Our investors and developer partners will greatly benefit from ORIX USA’s scale, innovative capital solutions and financial strength. We’re thrilled with the confidence that ORIX USA has shown in our platform and employees, and are poised for a new chapter in our company’s history, focused on the growth of our production effort and product expansion.”
Each company brings unique strengths to the transaction. Among them are ORIX USA’s expertise in delivering innovative capital solutions grounded in the financial stability and extensive capital resources of ORIX Corporation. Boston Financial has a talented management team and brings a strong track record of successful investments in the complex business of LIHTC syndication, along with deep relationships with developers and institutional investors and an exceptional asset management capability.
The combined companies will also benefit from natural synergies and growth opportunities including:
- Continuation of Boston Financial’s best-in-class syndication platform but now with the added financial strength of being part of the ORIX USA family of companies
- Better access to capital, potentially enabling developers to begin projects more quickly and possibly offering better investment opportunities to Boston Financial’s investors
- Numerous opportunities for ORIX USA business units—such as RED Capital Group, ORIX Real Estate Americas and ORIX Municipal and Infrastructure Investments—and Boston Financial to expand the depth and breadth of their product offerings, increasing high-quality affordable housing options to Americans
- ORIX USA, already being a direct investor in both affordable housing bonds and in LIHTCs, is able to broaden its investment activity in the affordable housing industry
Boston Financial will be a new separate subsidiary of ORIX USA with Cutillo continuing to serve in his current role as CEO. Cutillo will report to Andrew Garvey, Senior Managing Director and Head of ORIX USA Municipal and Infrastructure. Garvey will have overall responsibility for Boston Financial, ensuring it gets all the growth resources it needs from ORIX USA.
“ORIX USA’s municipal business includes being an active investor and capital provider in the tax-exempt and taxable affordable housing bond markets, making the combination of our two companies a good fit strategically and culturally,” Garvey said. “We share a common commitment to improving the quality of life for all Americans, strengthening our local economies by creating jobs, expanding a community’s tax base and making it easier for employers to attract and retain workers through investments in affordable housing.”
Cutillo and the current management team will continue to operate Boston Financial out of its headquarters in Boston. The acquisition was completed on July 8, 2016.