Growthpoint Properties Australia (Growthpoint or the Group) is pleased to announce that it has entered into an agreement under which it will acquire 100% of the shares in Fortius Funds Management Pty Ltd (Fortius) (the Transaction).
Transaction overview
- Fortius is one of Australia’s leading family-owned private real estate funds management businesses with an established track record of investing in Australian real estate markets and generating strong returns for its investors
- Transaction delivers on a strategic growth opportunity for the Group, adding $1.9 billion third party funds under management (FUM) to Growthpoint and bringing total assets under management to $7.2 billion1
- Consideration comprises a $45 million initial purchase price, with a net asset adjustment, to be paid in cash and funded from the Group’s existing liquidity and debt facilities
- Additional $10 million earnout component, subject to Fortius achieving agreed milestones relating to FUM and revenue growth over the period to June 2024
- Performance fees for existing funds received by the Group will be paid to the sellers on an after tax basis as an additional purchase price adjustment. Performance fees for new funds will accrue to Growthpoint
- Completion anticipated 1Q FY23, subject to satisfaction of conditions precedent including certain change of control consents being received
Strategic rationale
- Transaction brings enhanced sector and product capabilities, including office, retail, mixed-use and debt investments across value-add and opportunistic strategies
- Continuation of Fortius successful growth story, with founder and Executive Director Ray Sproats remaining as Senior Adviser for at least two years and CEO Sam Sproats joining the Group’s Executive Management Team as Executive Director – Funds Management
- Provides ability to scale up the platform significantly to drive incremental growth to earnings for securityholders
- Growthpoint intends to grow the funds management business, targeting 10-20% of Group EBIT, over the medium term
Read the full ASX announcement
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