Stockholm-headquartered global investment firm EQT has completed the acquisition of US-based Exeter Property Group for $1.9 bn (€1.6 bn), broadening the private equity giant's reach in real estate markets across Europe and North America.
EQT first announced in January that it had agreed to buy Exeter, which currently has some $10 bn assets under management. It paid about $800 mln in new shares plus $1,070 mln in cash, which includes the refinancing of $300 mln of existing Exeter debt.
Majority owned by Ward Fitzgerald and other members of the Exeter management team, Exeter was founded in 2006 and is focused on acquiring, developing and managing logistics/industrial, life science/office and residential properties mainly across the US and Europe.
‘We are happy to announce that the combination of Exeter and EQT’s real estate businesses is complete,’ said Lennart Blecher, head of EQT Real Assets and deputy managing partner. ‘Together, we will create a leader in thematic value-add real estate investments, allowing EQT to scale up its existing local execution efforts while also adding a prolific single asset deal platform. On behalf of the entire ExCom, we look forward to working together with Ward to further develop our global real estate footprint.’
Ward Fitzgerald, CEO and founder of Exeter, said, ‘The closing marks an important milestone for the combined company and we are excited about the opportunity to develop EQT Exeter into a true global leader in real estate. Our focus remains on driving returns and we are confident that, with our shared investment approach and complementary platform in Europe, North America and Asia, we will be able to create performance for the benefit of both current and future investors and clients.’
Growth ambitions
EQT said that the transaction was part of the group's strategic growth ambitions within real estate, and would create a scaled, thematic investment platform across Europe and North America.
With 37 local deal offices, Exeter is expected to report approximately $135 mln in revenues and approximately $80 mln in Ebitda in 2020.
Adding a scaled franchise alongside EQT’s private equity and infrastructure strategies strengthens the firm’s position in North America, an important strategic region for EQT as a whole, the firm said. Exeter also has around 90 existing fund investors.
EQT said it would seek further territorial expansion via the Exeter deal, describing the firm's 'established track-record' as 'based on a formula that seeks to be repeatable and scalable on a global basis, including in Asia-Pacific and Latin America, where Exeter has started to establish a foothold in logistics/ industrials'.
Property priorities
EQT launched its property arm, EQT Real Estate, in 2015. It currently holds around 10 investments across select European markets.
EQT has acquired 100% of the Exeter management company and 25% of the right to carried interest in selected existing Exeter funds (including Exeter US Industrial Value Fund V). In addition, EQT will be entitled to 35% of the carried interest of future funds.
