The terms of the deal, which is expected to close by the end of the year, were not disclosed.
Under the agreement, Thorofare will become the real estate arm of Callodine Group. Its full team will continue at the firm. Callodine will provide it with guidance and capital resources, but Thorofare’s management team, investment committee and investment process will stay intact. It will go by Callodine Thorofare.
Kevin Miller, Thorofare’s founder and chief executive, said the deal had been in the works for a while.
“We set out to look for growth capital so that we could continue to grow our business,” he said. “The opportunity set in front of us is so large that it made sense to bring in a financial partner.”
The company was previously funded from its own cash flow.
“We are incredibly fortunate to have the opportunity to partner with the Thorofare team and help them take what we believe is already a best-in-class real estate investment firm to the next level,” James Morrow, founder and chief executive of Callodine Group, said in a statement. “The entrepreneurial spirit with which Kevin, (Chief Investment Officer and Principal) Brendan Miller and the rest of the Thorofare team have built their business directly aligns with our core values here at Callodine.”
Kevin Miller agreed that the culture between the two companies was a great fit.
“They had the right culture, the right credit discipline, they are very investor centric in their approach, and we found all of what we were looking for culturally in the Callodine team,” he said.
Miller added that Callodine would help Thorofare with strategic guidance on things like new investment strategies, as well as to grow its team and offerings. Thorofare is looking at adding offices in Portland, Ore.; Seattle; Denver; Salt Lake City; Chicago; and Atlanta, and wants to build out its New York and Miami offices. The company launched a Dallas office this quarter.
For offerings, Thorofare is looking at adding a core plus lending vehicle, subordinate debt, preferred equity and joint venture equity.
“We look at all of these strategies as being complementary to our existing business,” Miller said.
Berkshire Global Advisors was the financial adviser, and Kirkland & Ellis was legal counsel to Thorofare. Aviditi Advisors was strategic adviser, and Skadden Arps Slate Meagher & Flom was legal counsel to Callodine.
