Real Estate

EQT to buy Exeter Property Group in $1.9bn deal


EQT has agreed to buy Philadelphia-based real estate investor Exeter Property Group for $1.9bn in a deal that will add $10bn to the Swedish private equity group’s assets under management.

The buyout group said on Tuesday it would pay just over $1bn in cash and the remainder in shares to acquire the US company, which invests in office space, industrial sites and business parks.

That will expand its presence in a market that has been disturbed by the shift to homeworking during the coronavirus pandemic.

Exeter will focus on properties that have been bright spots in the crisis including logistics sites, which have boomed amid a surge in online shopping, and residential property, which is seen as a relatively secure income stream.

“We have a high bar for strategic M&A, and Exeter is one of the few opportunities we have identified which clears and well surpasses it,” Christian Sinding, chief executive of EQT, said in a statement.

The deal values Exeter at about 23 times last year’s estimated $80m earnings before interest, tax, depreciation and amortisation.

Since EQT listed in Stockholm in 2019, “we’ve been spending quite a lot of time trying to figure out what our first acquisition is going to be”, Mr Sinding told the Financial Times.

“What we are trying to do is . . . we want to be sizeable, global in private equity, infrastructure and real estate — in active ownership strategies where you can work with the assets to create value,” he said. EQT sold its credit business to Bridgepoint last year.

Lennart Blecher, head of EQT’s real assets business — which Exeter will become part of — described the company as a “hidden gem”.

EQT had €52.5bn in assets under management in the year to December, before counting the impact of the Exeter acquisition — up 46 per cent from the previous year. Assets under management, which determines steady management fee income, is a key measure for private equity groups.

“I think most people expect interest rates will remain low for a long time,” Mr Sinding said. “There’s a lot of capital in the world searching for yield, and we think private markets is one of the most attractive areas.” EQT’s analysis suggested $10tn would be invested in private equity, real estate and infrastructure worldwide in the next decade, he added.

EQT announced the Exeter deal alongside its annual results, which showed revenues up 34 per cent to €762m as it started charging management fees on its latest fund and received carried interest payments — a profit share — on a €6.75bn fund it raised in 2015.

EQT’s shares jumped 13 per cent to SKr252 in the wake of the announcement. 



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