Blue Owl Capital Corp (OBDC) Price

Blue Owl Capital Corporation Reports Q3 Earnings Miss Amid Merger Agreement

## Q3 2025 Earnings Fall Short as Strategic Merger Unveiled **Blue Owl Capital Corporation (OBDC)** announced its third-quarter 2025 financial results, reporting earnings per share (EPS) of **$0.37**, which missed analyst consensus estimates by **$0.02**. Concurrently, the company's revenue for the quarter reached **$453.07 million**, an 11.58% increase year-over-year, but still **$13.50 million** below expectations. This earnings report coincided with a significant corporate development: the announcement of a definitive merger agreement between OBDC and **Blue Owl Capital Corporation II (OBDC II)**. ## Merger Agreement Details and Financial Outlook On November 5, 2025, Blue Owl Capital Corporation and Blue Owl Capital Corporation II issued a joint press release detailing a merger agreement wherein OBDC will acquire OBDC II. The transaction is structured with OBDC as the surviving entity, subject to the necessary shareholder approvals from OBDC II and other customary closing conditions. The boards of directors of both companies have unanimously approved the agreement, with the closing anticipated in the first quarter of 2026. This strategic merger is poised to expand OBDC's investment portfolio by an estimated **$1.7 billion** in investments at fair value, bringing the combined portfolio to approximately **$18.9 billion** across 239 portfolio companies. The combined entity is expected to maintain its focus on senior secured investments, with 80% of its portfolio in this category and only 1.3% of pro forma investments at fair value on non-accrual. Approximately 98% of OBDC II's investments overlap with those of OBDC, suggesting a high degree of integration potential. Shareholders of OBDC II will receive newly issued shares of OBDC based on an exchange ratio determined prior to closing, tied to each company's net asset value (NAV) as of a mutually agreed Determination Date. The merger is intended to qualify as a tax-free "reorganization." Beyond portfolio expansion, the merger is projected to yield annual savings of **$5 million**. Furthermore, on November 4, 2025, OBDC's board of directors approved a new share repurchase program, authorizing the company to repurchase up to **$200 million** of its common stock through open-market transactions over the next 18 months. ## Market Reaction and Broader Context The dual announcement of missed earnings and a strategic merger has created a mixed sentiment in the market. While the earnings and revenue miss could exert negative pressure on **OBDC**'s stock price, the merger introduces a layer of strategic growth and potential efficiencies. The significant increase in the investment portfolio and anticipated cost savings could be viewed positively in the long term, offsetting some of the short-term earnings disappointment. Financially, **OBDC** exhibits strong profitability, as evidenced by a net margin of 90.18%. However, the company has experienced a three-year revenue growth decline of 1% and a 15.6% decline in earnings growth over the past year. The balance sheet indicates a debt-to-equity ratio of 1.2, signaling a notable level of leverage. Despite these points, **OBDC**'s valuation metrics, including a P/E ratio of 8.46, P/S ratio of 7.67, and P/B ratio of 0.85, are currently near historical lows, potentially suggesting undervaluation to some investors. Analysts have set a target price of **$15.38** for **OBDC**, with a recommendation score of 1.8, indicating a generally favorable outlook. ## Looking Ahead Investors will closely monitor the progression of the **OBDC** and **OBDC II** merger, particularly the finalization of the exchange ratio and the successful navigation of shareholder and regulatory approvals. The expected closing in the first quarter of 2026 will be a key milestone. The realization of the projected **$5 million** in annual savings and the execution of the **$200 million** share repurchase program will also be critical factors influencing **OBDC**'s performance and investor confidence in the coming periods.