KKR property deal threads the needle in Japan
18/03/2022 03:19
(The author is a Reuters Breakingviews columnist. The opinions
expressed are their own.)
MELBOURNE, March 18 (Reuters Breakingviews) - KKR is getting
bigger in Japan. The buyout shop on Thursday struck a deal https://irpages2.eqs.com/download/companies/kkrinc/Press%20Release/KKR%20to%20Acquire%20MC-UBSR%20Press%20Release.pdf
to buy one of the country’s biggest property managers from
Mitsubishi Corp 8058.T and UBS UBSG.S for $2 billion. It’s a
shrewd acquisition in more ways than one.
KKR will significantly beef up its regional and sector
presence by owning MC-UBSR and the $14.5 billion of office,
retail, hotel and industrial property assets it controls through
two publicly traded real estate investment trusts. Such growth
and diversification are an important part of the story for
private equity investors these days. Citi analysts reckon the
valuation of 20 times estimated pre-tax, fee-related earnings
for 2023 stacks up well compared to other recent deals.
By using only cash from its balance sheet for the
acquisition, KKR also sidesteps any tricky borrowing talks. Many
Japanese banks just opened tough, and potentially costly,
negotiations on a roughly $10 billion restructuring of KKR’s
auto-parts maker Marelli urn:newsml:reuters.com:*:nL3N2VD0OJ. It’s one more reason to
keep a rainy-day fund. (By Jeffrey Goldfarb)
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(Editing by Antony Currie and Katrina Hamlin)
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