Blackstone, senior management sell Valad Europe for €145m

Australia's Cromwell Property Group has acquired Valad Europe from senior management and Blackstone for €145 mln. The purchase price reflects an EBITDA multiple of approximately 6.4 times.

Valad Europe is a diversified European investment manager which manages €5.3 bn of assets across 24 mandates in 13 European countries. It announced on Tuesday that it had been sold by the senior management and Blackstone Real Estate Partners VI to Cromwell 'following a highly competitive process spanning the last six months'.

Blackstone Real Estate Partners VI has held Valad Europe since 2011 and as a defined life fund always planned to exit within a few years.

The deal - which is subject to regulatory approval - heralds the entry of a major Australian listed property company into Europe for the first time since the outbreak of the crisis, and renewed backing from a listed Australian property for the Valad Europe platform.

Valad Europe provides Cromwell with an integrated pan-European real estate investment management platform complimenting its existing fund management operations in the Asia-Pacific region and the acquisition is consistent with Cromwell's strategy of increasing the proportion of its total revenues derived from fund management activities globally.

THE AUSTRALIANS ARE BACK
Cromwell is an Australian REIT in the ASX/S&P 200 Index and has a market capitalisation of €1.8 bn. It intends to keep Valad Europe 'focussed on delivering superior returns to its existing mandates', growing its business across Europe and diversifying its investor base globally.

Valad Europe will continue to be run by the same management team led by Martyn McCarthy, executive chairman of Valad Europe. The platform will continue to be operated as an independent business, working with a broad spectrum of capital partners including sovereign wealth funds, pension funds and private equity funds as well as banks and financial institutions.

COMMENT
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 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, added: '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.'

Valad Europe began life in 2007 when Sydney-listed property company Valad Property Group entered Europe with the acquisition of the Teesland/iO Group fund and asset management group. During the crisis Australian players retreated from European businesses, some of which in hindsight were acquired at steep prices. Blackstone acquired Sydney-listed Valad and Valad Europe's management partners, with Blackstone Real Estate Partners VI, privatised the European business.

Click here for a Q&A interview with David Kirkby, chief investment officer of Valad Europe, about the sale