Brookfield Unit Signs $5 Billion Deal for TDR-Backed Modulaire

A unit of Brookfield Asset Management Inc. agreed to acquire Modulaire Group, the European designer of modular work spaces backed by TDR Capital for about $5 billion, in one of the largest private equity deals in Europe this year.

Brookfield Business Partners LP, a listed arm of the $600 billion-plus Canadian investment firm, plans to fund the deal with about $1.6 billion of equity, it said in a statement Sunday. The unit itself will commit $500 million, with the balance to be funded by its institutional partners. Brookfield Business Partners could syndicate a portion of its equity investment to other investors.

“We look forward to bringing our global scale and capabilities in owning and operating leading infrastructure services businesses to support Modulaire’s growth, in partnership with the management team,” Anuj Ranjan, managing partner of Brookfield Business Partners, said in the statement.

Bloomberg News reported the parties were closing in on the deal earlier, citing people familiar with the matter. The deal is one of the largest-ever for the Canadian firm’s European private equity business and signals its intent to expand buyout investments on the continent. The transaction adds to $125 billion of private equity deals targeting European companies this year, according to data compiled by Bloomberg, as firms deploy record amounts of capital and take advantage of cheap financing.

Modulaire designs modular buildings that can be rented for work and living, as well as portable storage units. Demand for these services have picked up amid the pandemic as businesses seek to cut costs and shy away from longer-term work-space contracts. The company operates across Europe and in Asia. TDR acquired the company in 2004 and has since expanded it through a string of acquisitions.

The company reported a 27% increase in revenue, including from acquisitions, to 320 million euros in the first quarter. Earnings before interest, taxes, depreciation and amortization rose 44% during the period to 97 million euros, including acquisitions.

Brookfield Business Partners is a unit of the Canadian firm which invests in business services and industrial sectors. The investment firm is weighing a sale of U.K.-based biofuel provider Greenergy, Bloomberg News reported in May.

©2021 Bloomberg L.P.

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