Keppel to buy Aermont Capital in two phases for up to 931.9 million euros

KEPPEL Corporation has agreed to acquire an initial 50 per cent stake in Aermont Capital, for a consideration of up to 356.9 million euros (S$521.8 million), the asset manager and operator announced on Wednesday (Nov 29). This includes a deposit upon entering the agreement, a closing amount, and post-closing adjustments.

It plans to subsequently acquire the remaining shares in the European real estate manager, for a maximum of 575 million euros. That brings the maximum consideration for the acquisition to 931.9 million euros.

The base of the consideration is contingent on Aermont’s performance, said Keppel, adding that the two have agreed on the multiples which would determine the eventual price of the acquisition. (*see amendment)

This will give Keppel “an immediate and strong foothold in Europe” and expand its presence beyond Asia-Pacific, said Keppel chief executive Loh Chin Hua at a virtual briefing on the acquisition.

The first tranche of the acquisition, expected to be completed in the first half of 2024, will be funded through a combination of cash and treasury shares acquired through Keppel’s earlier share-buyback programme, Keppel pointed out.

It intends to proceed with acquiring the remaining shares in Aermont in 2028.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

Commenting on the deal structure, Loh said: “Our goal is to grow... (it) is not to try and limit the price we pay for the second phase. Our goal is to really work very closely with our new partners to see how quickly we can grow.”

Aermont will serve as Keppel’s European real estate platform, expanding its asset-management capabilities beyond the Asia-Pacific, and strengthening its value proposition to global limited partners, the Mainboard-listed company said.

The transaction is expected to be immediately earnings-accretive to Keppel upon its completion, boosting recurring income with minimal gearing impact. It will increase Keppel’s funds under management by S$24 billion to S$77 billion, from S$53 billion now.

SEE ALSO

Keppel, NUS to launch hybrid AC/DC microgrid as part of multi-pronged project

Historically, half of Aermont’s investments have been in real estate investments such as office, student accommodation, workforce housing and luxury hospitality. The other half, it said, were made in “operational platforms”.

“(There is) further upside potential from co-creating new fund products,” said Keppel, adding: “The initial focus will be to maintain and support Aermont’s platform, and collectively harness growth opportunities through joint funds.” 

Assuming the initial 50 per cent acquisition was completed on Dec 31, 2022, Keppel’s pro forma net tangible assets (NTA) per share as at that date would still have been S$5.49, if the share consideration amount is satisfied entirely in cash, and S$5.50 if satisfied in shares.

Had the full acquisition phases been closed on Dec 31, 2022, its NTA per share as at that date would have been S$4.76 instead of S$5.49, with the consideration amount satisfied entirely in cash, and S$4.82 if satisfied in shares.

The group’s pro forma earnings per share would still have been S$0.521 if satisfied entirely in cash, and S$0.524 if satisfied in shares, had the first phase of the acquisition been completed on Apr 1, 2022.

Assuming that both acquisition phases closed on Apr 1, 2022, Keppel’s earnings per share would S$0.513 instead of S$0.521 if satisfied entirely in cash, and S$0.511 if satisfied in shares.

In 2023, Private Equity Real Estate ranked Aermont the highest among Europe-based real estate firms in terms of funds raised in the last five years.

Aermont has a network of over 50 blue-chip limited partners, including public pension funds, sovereign wealth funds and endowments and foundations.

Shares of Keppel Corporation closed at S$6.43 on Wednesday, up S$0.09 or 1.4 per cent, before the announcement.

Amendment: The article earlier stated that the multiples to determine the consideration price has not been agreed upon. The inaccuracy has been amended.