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Highlights
- The deal includes an AU$250 million upfront cash payment and an AU$300 million earn-out consideration.
- The transaction is expected to complete during the second half of 2022.
- Collimate is a wholly owned subsidiary of AMP Limited.
Real estate firm Dexus Funds Management Ltd (Dexus, ASX:DXS) has agreed to buy Collimate Capital Limited's (Collimate) real estate and domestic infrastructure equity business, according to an ASX release. The transaction is expected to complete during the second half of 2022.
On the back of the news, Dexus' shares were trading 1.58% higher at AU$10.96 each at the time of writing this article. This outperforms ASX 200 Real Estate Index, which was 0.84% lower at 3,663.40 at the same time.
Also Read: AMP (ASX:AMP), Dexus (ASX:DXS) in talks over sale of Collimate Capital
Source: © Andreyyalansky19 | Megapixl.com
More about the deal
The deal includes an AU$250 million upfront cash payment and an AU$300 million earn-out consideration that is subject to several conditions.
Many elements, including the effective transition of assets under management (AUM), will be considered in the final assessment months after the transaction has been completed.
Dexus will also offer to buy co-investment holdings in the platform for a total cash price of up to AU$450 million, subject to investor negotiations, pre-emptive rights processes, and appropriate consent.
Image Source: © 2022 Kalkine Media ®
Collimate Capital
Collimate is a wholly owned subsidiary of AMP Limited. The company’s real estate and domestic infrastructure equity business is built on a solid foundation of pooled funds and separately managed accounts (SMAs). The platform now has AU$27.9 billion in AUM, which is split between real estate (AU$18.2 billion) and infrastructure (AU$9.7 billion).
What does the deal mean for Dexus?
The acquisition is in keeping with Dexus's aim of broadening and extending its funds management business, and it will help the company grow faster by combining two complementing platforms.
Dexus' transaction is supported by a convincing strategic rationale:
Image Source: © 2022 Kalkine Media ®
Darren Steinberg, Dexus CEO said, “Infrastructure is a logical next step for Dexus’s funds management business, underpinned by compelling sector fundamentals and a positive growth outlook.”
About Dexus
Dexus owns and maintains a fully integrated Australian real estate portfolio worth AU$45.3 billion. The firm's goal is to develop long-term revenue streams and be the preferred real estate investment partner with deep access to capital pools.
Also Read: LLC, GMG, DXS: How are these real estate stocks faring on ASX?
