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Image: Canva, Dexus.
  • DXS to acquire Collimate's real estate and domestic infrastructure equity business
  • Payables include $250M upfront cash, $300M earn out consideration, and $450M for co-investment stakes
  • Collimate platform currently has $27.9B of AUM

On Wednesday, Dexus announced that it had entered into a share sale and purchase agreement with a wholly owned subsidiary of AMP Limited: Collimate Capital Limited, to acquire Collimate’s real estate and domestic infrastructure equity business for an upfront cash consideration of $250 million.

The deal will see AMP receive a further cash earn out of up to $300 million.

This is subject to a range of factors including the successful transition of assets under management and will be finally assessed nine months following completion of the transaction.

AMP said that it considers it unlikely the full earn out will be received given the current expected loss of AUM of approximately $3.0 billion.

Dexus will also offer to acquire co-investment stakes in the platform for total cash consideration of up to approximately $450 million, subject to discussions with investors, pre-emptive rights processes and relevant consents.

Dexus said it intends to debt fund the total consideration payable utilising existing balance sheet capacity.

AMP said the transaction perimeter for the sale of the real estate and domestic infrastructure equity business includes:

  • A$31 billion invested AUM, including domestic real estate AUM of A$21 billion and infrastructure equity AUM of A$10 billion
  • The management platform, including all domestic funds and mandates
  • Real estate and infrastructure business unit teams and a range of support teams
  • All of AMP’s sponsor investments in real estate funds, including the future committed investments AMP announced as part of its FY 21 result.

AMP will retain its 24.99% equity stake in PCCP and sponsor stake in PCCP Fund VIII (total book value of A$208 million as at 31 December 2021).

The company said it intends to use the proceeds to pay down some of its corporate debt and to return capital to shareholders following the sale completion. The capital return will be subject to regulatory and shareholder approval.

Collimate

The company’s real estate and domestic infrastructure equity business comprises pooled funds and separately managed accounts.

Collimate currently has $27.9 billion of assets under management, with $18.2 billion of that in real estate, and $9.7 billion in infrastructure.

Collimate holds co-investment stakes in the platform funds totalling circa $180 million, which Dexus will offer to acquire as part of the transaction.

In addition, Collimate has provided a commitment to acquire a further circa $270 million of units in AMP Capital Wholesale Office Fund (“AWOF”), which Dexus will also offer to acquire as part of the Transaction.

Total cash consideration payable by Dexus for these co-investments is dependent on their current unit value at the time and is anticipated to be circa $450 million.

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