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ADLER Real Estate AG signs merger agreement to acquire all shares in A.D.O. Group Ltd (ADO Group), for c. EUR 708m; transaction will result in ADLER holding 33.0% stake in ADO Properties S.A (ADO Properties).
DGAP-News: ADLER Real Estate AG
/ Key word(s): Mergers & Acquisitions
23.09.2019 / 07:52
The issuer is solely responsible for the content of this announcement.
ADLER Real Estate A.G. (ADLER) signs merger agreement to acquire all shares in A.D.O. Group Ltd (ADO Group), for c. EUR 708m; transaction will result in ADLER holding 33.0% stake in ADO Properties S.A (ADO Properties).
- Transformational transaction creating a combined German residential company with a real estate portfolio with a gross asset value (GAV) of EUR 9.4bn
- Purchase price represents a 15% discount to ADO Properties' H1 2019 reported EPRA NAV not including any expected premium to be realised in connection to the possible sale of a real estate portfolio announced by ADO Properties on 16 September 2019
- Total equity consideration of c. EUR 708m and total value of transaction is c. EUR 970m1
- To be funded by a combination of a rights issue, fully guaranteed and backstopped by ADLER anchor shareholders, cash from disposals of non-yielding assets and financial debt
- BB Stable Outlook rating to be reaffirmed post-closing the transaction
- Expected to reduce ADLER's pro forma H1 2019 LTV on a fully consolidated basis to c. 47% or c. 58%on a proportionally consolidated basis assuming completion of the proposed sale of a real estate portfolio announced by ADO Properties on 16 September 2019
Berlin, 23rd September 2019: ADLER has agreed to acquire all the shares of ADO Group, an Israeli listed holding company and shareholder in ADO Properties, a EUR 4.4bn GAV German-listed, residential, real estate company with a high-quality portfolio focused on Berlin.
Initially, the transaction will be funded by acquisition finance which ADLER intends to repay through a combination of a rights issue fully-guaranteed and backstopped by ADLER anchor shareholders, cash from the disposals of non-yielding assets and financial debt. The BB stable outlook rating for ADLER is expected to be reaffirmed upon completion of the transaction.
Following this acquisition ADLER will hold a 33.0% stake in ADO Properties, a dividend paying company, and will see its main KPI's improving on a fully consolidated basis.
Tomas de Vargas Machuca commented "This purchase has an attractive entry price below ADO Group's EPRA NAV. This represents a highly attractive transaction on value per square meter and a considerable discount to privately traded berlin residential portfolios. The acquisition also provides longer term opportunities to generate sustainable shareholder value"
Maximilian Rienecker added "This transaction strengthens our balance sheet and P&L. It also further enhances our capital structure and reduces our fully consolidated leverage position Against this background ADLER will review its dividend policy for the current financial year."
ADLER's current portfolio provides significant upside potential in B locations primarily through yield compression and rental growth. This transaction adds high quality assets in Berlin, which the management believes offers long-term potential for rental and asset value growth.
This transaction will create a large, pure-play German residential real estate company with a fully consolidated GAV of EUR 9.4bn, net rental income of EUR 366 and FFO I of between EUR 130m and 140).
Summary of Key Operational and Financial Metrics
Note: LTV figures above include the expected effects of the ADO Properties' real estate portfolio sale announced on 16 September 2019.
ADO Properties S.A.
Proposed Sale of a Real Estate Portfolio
JPMorgan is acting as exclusive financial advisor and sole provider of acquisition financing for ALDER in context of this transaction. Freshfields is acting as German M&A counsel. Freshfields Bruckhaus Deringer is advising ADLER on German M&A, corporate law and the debt financing, Meitar Liquornik Geva Leshem Tal on Israeli M&A, Arendt&Medernach on Luxembourg corporate and securities laws and Norton Rose Fulbright is advising on the equity financing.
- ENDS -
ADLER to hold a conference on the acquisition at GMT 3.00pm (CET 4.00pm).
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|Company:||ADLER Real Estate AG|
|Joachimsthaler Straße 34|
|Phone:||+49 30 398 018 10|
|Fax:||+49 30 639 61 92 28|
|ISIN:||DE0005008007, XS1211417362, DE000A1R1A42, DE000A11QF02|
|WKN:||500800, A14J3Z, A1R1A4, A11QF0|
|Indices:||SDAX, GPR General Index|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||877809|
|End of News||DGAP News Service|