EQT, the Swedish private equity group, has agreed to buy Philadelphia-based real estate investor Exeter Property Group for $1.9bn, merging it with its own operations in a deal that will add $10bn to its assets under management.
The buyout group will 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, it said on Tuesday.
That will expand its presence in a market that has been roiled by the shift to working from home since the coronavirus pandemic began. Exeter will focus on properties that have been bright spots in the crisis. They include 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.
Lennart Blecher, head of EQT’s real assets business — which Exeter will become part of — described the company as a “hidden gem”.
EQT, which listed in Stockholm in 2019, had €52.5bn in assets under management in the year to December, before counting the impact of the Exeter acquisition. That was up 46 per cent from the previous year. The value of assets under management, which determines steady management fee income, is a key measure for private equity groups.
It announced the deal alongside the publication of its annual results, which show 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.