EQT Soars to Record Valuation on $1.9 Billion Property Deal

Sweden’s EQT AB, one of Europe’s biggest private equity firms, added about a fifth to its share price after striking a $1.9 billion deal that gives it access to real estate markets across North America and Europe.

Stockholm-based EQT agreed to take over closely held Exeter Property Group, it said on Tuesday. It will pay about $800 million in new shares and the rest in cash. The announcement drove EQT’s stock up roughly 20%, giving it a record valuation of more than $30 billion.

Christian Sinding, EQT’s chief executive, said buying Exeter fits with his “strategy of building a globally-scaled real estate platform.”

The takeover gives the Swedish company control over a U.S.-based property business with more than $10 billion under management in an asset class that’s become increasingly popular among institutional investors after years of ultra-low interest rates.

Analysts at Citi described EQT’s takeover as a “key positive” as it adds assets under management and supports “diversification across asset classes and geographies.”

EQT, which announced the takeover the same day it unveiled a 34% increase in annual revenue, said the cash portion of its payment for Exeter includes refinancing $300 million in existing Exeter debt. The deal “is expected to be accretive to EQT’s earnings” this year, it said.

Click here to read more about EQT’s 4Q results

Exeter mostly invests in logistics and industrial property in the U.S. and Europe, but has started doing more in U.S. life science and suburban office spaces, as well as the residential sector, “which is highly complementary to EQT’s existing strength in European real estate,” the Swedish company said.

In its fourth-quarter report, EQT said its assets under management grew to 52.5 billion euros ($63.7 billion) in 2020, 46% more than a year earlier.

Sinding said EQT is “continuously” monitoring what he called “white spaces geographically” for potential takeovers. “But right now, we are razor focused on Exeter.”

JPMorgan was EQT’s financial adviser, while Kirkland & Ellis and Vinge acted as legal counsel. Berkshire Global Advisors assisted Exeter, with Goodwin Proctor providing legal counsel.

Story Link: EQT Agrees to Buy Exeter Property Group for $1.87b

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