PATRIZIA acquires Rockspring Property Investment Managers LLP
PATRIZIA Immobilien AG on 19 December 2017 signed an agreement to acquire Rockspring Property Investment Managers LLP (“Rockspring”), an independent and management-owned investment manager with pan-European assets under management (AuM) of EUR 7.0 billion.
This transaction gives PATRIZIA’s and ROCKSPRING’s institutional clients increased reach and access to European markets and an enhanced network of local market experts. At the same time, the enlarged independent platform will offer new capabilities and broaden PATRIZIA’s product range and, taking into account Rockspring’s complementary global fundraising activities, will significantly expand PATRIZIA’s investment management and fundraising activities.
London-headquartered Rockspring, like PATRIZIA, has a more than 30-year track record and serves over 120 institutional investors in 20 countries. With 110 staff it manages real estate investments primarily in the office and retail sector out of its seven offices in Europe. AUM is split between UK & Ireland (35%), Germany (34%), France (13%) and diversified Europe (19%). More than 75% of Rockspring’s revenues are based on recurring asset management fees while it is maintaining a lean cost structure platform.
Rockspring offers PATRIZIA a highly complementary fundraising structure with 31% of its institutional investors originating in the UK, 27% from the Asia Pacific region and 5% from North America with the remaining 37% from continental Europe, whereas in PATRIZIA the majority of its clients originate in Germany. Around 80% of Rockspring’s investors are pension funds, while it also counts insurance companies and other institutional investors amongst its clients.
This transaction, which builds on the Group’s enhanced scale following recent acquisitions of both TRIUVA and Sparinvest Property Investors (SPI) in the fourth quarter 2017, increases PATRIZIA’s assets under management to approximately EUR 40 billion and strengthens the Company’s position as one of the leading independent real estate investment managers in Europe. Furthermore, it will broaden PATRIZIA’s product range, enabling institutional and private investors to access new markets, asset classes and risk profiles with their investments. PATRIZIA expects to achieve revenue synergies from cross-selling and fundraising. Given the complementary nature of the transaction, PATRIZIA expects a fast integration into the Group.
During the negotiations, that spanned the last few months, both parties agreed to not disclose the purchase price, which will partially be paid in PATRIZIA treasury shares, aligning interests of Rockspring’s management team and PATRIZIA stakeholders. Following the acquisition of SPI, TRIUVA and Rockspring, PATRIZIA will have available liquidity of around EUR 450 million.
PATRIZIA will publish details with regards to the positive financial impact of the acquisition together with its full-year 2017 results in the first quarter of 2018. PATRIZIA expects the transaction to close at the end of the first quarter 2018 at the latest and to be earnings accretive in the year of acquisition. Excluding future synergies PATRIZIA expects the acquisition on stand-alone basis to contribute a higher single-digit EUR million amount to the company’s EBIT going forward.
The closing of the transaction is subject to approval from regulatory authorities in the UK, Germany and Poland and other customary closing conditions.