Global alternative asset manager TPG is strengthening its digital infrastructure presence through the acquisition of Peppertree Capital Management in a deal valued at up to $960m (€844.6m).
TPG has agreed to offer up to $242m in cash and up to $418m in equity to acquire Peppertree as part of a transaction which also includes a further payment of up to $300m in performance-related targets.
Peppertree, founded in 2004, has $7.7bn in assets under management. The manager focuses on investing in wireless communications towers and related infrastructure.
The acquisition of Peppertree will give TPG an immediate scale in wireless communications tower and network infrastructure development as well complement its existing cross-platform in the internet, digital media and communications sector, the company said.
AMG said it expects to receive approximately $240m for its minority stake in Peppertree, by way of $102m cash and around 2.9m TPG Class A common shares.
Jon Winkelried, CEO of TPG, said the acquisition of Peppertree represents TPG’s further expansion into the digital infrastructure space, “where we see significant potential to grow our capabilities over time”.
“This transaction underscores our continued focus on strategic growth into new segments of alternative asset management where we have a competitive advantage, creating new investment opportunities for our clients and driving value for our shareholders.
“The Peppertree team shares our commitment to entrepreneurship, innovation, and investing excellence, and we look forward to welcoming them to TPG at an exciting time for our firm,” Winkelried added.
Peppertree co-presidents Howard Mandel and Ryan Lepene will continue to lead Peppertree’s investing strategy, with additional support from TPG, alongside Peppertree’s existing team.
“Over the last two decades, Peppertree has built deep relationships with our portfolio companies and investors, helping them effectively navigate the evolving wireless network landscape and respond to surging data demand.
“Joining TPG’s global alternatives platform will provide us with the additional scale and resources needed to capitalise on significant opportunities across the markets we operate in,” Mandel and Lepene said in a joint statement.
David Trujillo and John Flynn, partners at TPG, said: “Peppertree’s track record of investing in high-quality wireless communications towers and critical digital infrastructure assets, combined with TPG’s thematic investing approach and legacy of scaling innovative internet and communications companies, positions us to leverage our collective insights and expertise to build high-quality, growing digital infrastructure-related businesses.”
Jay C Horgen, president and CEO of AMG, said: “We are so pleased to have partnered with Ryan, Howard, and the Peppertree team, collaborating to magnify the firm’s growth and success, and to have supported Peppertree in accomplishing its strategic objectives.
“AMG’s alignment with the partners of Peppertree, through our minority interest in the business, has resulted in a successful outcome for all stakeholders. We wish the Peppertree team the best going forward.”
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