Valad Europe acquired by Cromwell Property Group

27/01/15

Valad Europe, the leading diversified European investment manager, has been acquired for a consideration of €145 million by Cromwell Property Group ("Cromwell"), one of Australia's leading property investment and funds management groups with a market capitalisation of €1.8 billion, from Valad Europe senior management and Blackstone Real Estate Partners VI ("Blackstone"), following a highly competitive process spanning the last six months. The purchase price reflects an EBITDA multiple of approximately 6.4x[i].


Cromwell, one of Australia's leading REITs in the ASX/S&P 200 Index, values the unique size and breadth of the Valad Europe platform and the local experience of its investment and asset management teams across a range of commercial real estate sectors. Following the completion of the acquisition, Valad Europe will continue to remain focussed on delivering superior returns to its existing mandates, growing its business across Europe and diversifying its investor base globally.


It will continue to be run by the same management team led by Martyn McCarthy, Executive Chairman of Valad Europe, who have all committed to the future growth of the business under Cromwell's ownership. Valad Europe will continue to be operated as an independent business, being able to work with a broad spectrum of capital partners including sovereign wealth funds, pension funds and private equity funds as well as banks and financial institutions.


Managing €5.3 billion of assets across 24 mandates in 13 European countries, Valad Europe provides Cromwell with an integrated pan-European real estate investment management platform that complements its existing funds management operations in the Asia-Pacific region and is consistent with its strategy of increasing the proportion of its total revenues derived from funds management activities globally.


Cromwell CEO, Paul Weightman, said: "The acquisition of Valad Europe presents the opportunity to acquire a successful, value add property funds management platform with scale across a number of geographies and sectors. The business is a strong cultural fit with Cromwell, is complementary to our existing funds management operations and furthers our strategy to increase the earnings contribution from funds management to approximately 20%.


"We welcome Martyn McCarthy and the rest of the Valad Europe team and look forward to continuing to grow the Valad Europe business, and to taking advantage of future opportunities across the two platforms."


Martyn McCarthy, Executive Chairman of Valad Europe said: "We are very pleased to have in Cromwell a long term capital partner who is committed to funds management, and is supportive of our continued aspirations to deliver strong performance to, and alignment with, our investor and banking financial partners."


Anthony Myers, Head of Real Estate Europe at Blackstone, said: "Valad Europe has been a successful investment for us and the business continues to strengthen its presence in the European market. We wish the team well with Cromwell and are confident that they will continue to create further success."


The acquisition is conditional on Cromwell and Valad Europe receiving regulatory approvals from the UK Financial Conduct Authority and the Guernsey Financial Services Commission which is expected to be received by 9 April 2015.




[i] Calculated based on allocation of purchase price to funds management business of €110 million divided by Valad Europe's forecast FY15 EBITDA of €17.1 million, which excludes performance fees and co-investment income.



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