Brookfield’s open-ended core infrastructure fund has agreed to pay up to SEK10.4bn (€962.4m) to acquire a 49% stake in Samhällsbyggnadsbolaget I Norden’s (SBB) Nordics public education portfolio.
Brookfield Super-Core Infrastructure Partners is buying the stake in SBB’s entire SEK44.9bn social infrastructure portfolio for public education known as EduCo.
SBB said it has formed EduCo by contributing its public education portfolio. SBB will retain a 51% stake in EduCo which includes preschools, elementary schools, upper-secondary schools and universities.
The EduCo portfolio consists of 585 income producing assets spread across the Nordic region. Around 55% of the portfolio’s gross asset value is in Sweden, 38% in Norway, 5% in Finland and 2% Denmark.
As part of the deal, the Brookfield fund will pay SBB SEK9.2bn upfront in cash and earn-out payments of up to SEK1.2bn.
EduCo’s debt financing will consist of existing external bank financing of SEK6.9bn and SEK14.5bn of inter-company financing provided by SBB to EduCo.
Eduardo Salgado, a managing partner in Brookfield’s infrastructure group and head of Brookfield Super-Core Infrastructure Partners, said: “By partnering with SBB, we achieve a best-in-class operational set-up with an organisation that has a strong local market presence, deep expertise and an exceptional track record in executing social infrastructure transactions in the Nordics.
“This is a unique opportunity to invest in the leading social infrastructure educational portfolio in the Nordic region. This is a sought after and resilient asset class, underpinned by the essential nature of the underlying assets and its predictable, inflation-secured cash flows under very long contracts. This partnership is highly attractive for us given SBB’s extensive experience in working with municipalities and publicly funded operators in the Nordics within the educational sector.”
Ilija Batljan, CEO and founder of SBB, said: “We are delighted to join forces with Brookfield, a world-class, highly reputable infrastructure asset investor. Establishing EduCo will make us even better placed to continue delivering important infrastructure to the Nordic welfare states.
“There will be an increasing need for schools, preschools and university buildings in the Nordics, a market in which we already have a strong foothold. With Brookfield as our long-term partner we will also benefit from diversifying SBB Group’s funding sources, whilst we accelerate deleveraging of our group balance sheet in line with our strategy.”
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