Agasti Holding ASA enters into an agreement to sell its business to Blackstone
Agasti Holding ASA ("Agasti") has on 6 July 2016 entered into an agreement with Audrey Management Holdings S.á.r.l., a company controlled by Blackstone L.P., regarding the sale (the "Transaction") of
(i) Agasti's 66 % share of Obligo Holding AS ("Obligo"); and
(ii) financial assets consisting of fund units and a USD 2.5 million convertible loan to Wunderlich Investment Company, Inc. ("Financial Assets", and together with Obligo, the "Business").
The agreed consideration is NOK 215 million, payable in cash on completion of the Transaction. The consideration represents approximately NOK 0.73 per Agasti share, before payment of transaction and liquidation costs.
- The Transaction with Blackstone in 2015 has directly contributed to distributions to the shareholders of Agasti of NOK 1.14 per share. Taking the agreed consideration for the Business into account, the shareholder values of Agasti will have been approximately doubled since Agasti initiated discussions with different international participants in late 2014. Assuming that assets under management and the management fees of Obligo will be significantly reduced in 2016 and 2017, further reducing the dividend capacity of Obligo, a majority of the board members have concluded that the consideration represents a fair price for the Business and that the Transaction is in Agasti's and the shareholders' interest. The conclusion is based on advice from the company's financial advisor, ABG Sundal Collier, and is supported by significant levels of pre-commitment from the shareholders, says chairman of the Board of Agasti Kathryn Moore Baker.
Completion of the Transaction is conditional only upon approval from the general meeting of Agasti with a 2/3 majority of the votes cast. Shareholders representing 39.89 % of the shares have committed to vote in favour of the Transaction on terms customary for such undertakings.
The board of Agasti has the opportunity to withdraw or amend its recommendation to vote in favour of the Transaction if a more attractive offer for the Business is received.
A minority of the board members does not wish to recommend the transaction with Blackstone to the shareholders, but to leave to it the general meeting to decide. The board of Agasti encourages its shareholders to individually consider the merits of the Transaction.
Significance of the Transaction
Agasti will, upon completion of the Transaction, no longer have any operations or assets, other than the cash consideration received under the Transaction. The board believes the best way to maximise shareholder value is to liquidate the company and distribute the net values to the shareholders.
A general meeting is expected to be held on or about 22 August 2016, and it is expected that the Transaction will close during Q3 2016. Agasti will work towards liquidation as soon as practically possible after completion of the Transaction, and a proposal to distribute the net values will be presented to the shareholders in an extraordinary general meeting.
No members of the board or key employees have entered into any agreements in connection with the Transaction. Management and key employees of Obligo have been in discussions with Blackstone regarding investing all or part of their liquidation proceeds from Agasti in Obligo, but no agreements have yet been concluded.
Background for the Transaction
In the fall of 2012, Agasti was in a challenging situation. The company had received several thousand complaints with a financial exposure of more than NOK 500 million. The company also faced a complicated but necessary restructuring of its operations, in parallel with establishing a new business platform based on new competence and investments. Since then, the company has terminated all previous business, including all complaints and the financial risk associated with these, established an institutional investor platform with Blackstone as owner and partner, offered its shareholders liquidity and exit events by providing distributions of more than NOK 10 billion.
The result of the restructuring was a new business organised through Obligo, which was established in October 2015, in connection with Blackstone Real Estate Funds entering into an agreement to acquire 34 % of Agasti's then operating business. Agasti's business continued as a pure investment company holding 66 % of Obligo, without operations of its own.
Today, Obligo is an international management company with an established institutional investor platform and a primary focus on investing in and managing real estate in the Nordic region. As of Q1 2016, the company was managing more than NOK 44 billion in assets, distributed among around 30 investment companies. Obligo manages investment portfolios in (i) real estate, (ii) shipping, (ii) private equity and (iii) infrastructure.
Obligo is, through its subsidiary Obligo Investment Management AS, a licensed AIF management company by the Norwegian Financial Supervisory Authority. Obligo has around 45 staff and the head office is situated in Oslo. The company also has offices in Stockholm and New York. The management team of Obligo consists of Jørgen Pleym Ulvness (CEO), Christian Dovland (CFO) and Svein Erik Lilleland (Head of Corporate Finance).
In addition Agasti holds, through Acta Kapitalforvaltning AS, units in 26 real estate, shipping, infrastructure and private equity funds. Acta Kapitalforvaltning AS will sell these to Blackstone as part of the Transaction.
Agasti further holds a USD 2.5m convertible loan to Wunderlich Investment Company, Inc. which matures 31 July 2017, which is also being transferred as part of the Transaction. The value of the conversion rights is believed to be insignificant, as per Agasti's annual report for 2015.
Key figures for the Business
Profit and Loss
(All amounts in NOK 1000)
Obligo was formed in October 2015 and has no financial history prior to that.
The Agasti group will book a loss of NOK 188 million in its accounts, which represents the difference between the book value and the consideration received for the assets sold. It is estimated that the parent company, Agasti Holding ASA, will book a net profit of NOK 107 million in its accounts. Agasti's preliminary view is that no taxes payable will be triggered by the Transaction.
Blackstone owns the remaining 34 % of Obligo. Blackstone is a leading global participant in real estate investing. Blackstone's real estate business was founded in 1991 and has more than $91 billion in investor capital under management. Blackstone's real estate portfolio includes hotel, office, retail, industrial and residential properties in the US, Europe, Asia and Latin America. Major holdings include Hilton Worldwide, Invitation Homes (single family homes), Logicor (pan-European logistics), SCP (Chinese shopping malls), and prime office buildings in the world's major cities. Blackstone real estate also operates one of the leading real estate finance platforms, including management of the publicly traded Blackstone Mortgage Trust (NYSE: BXMT).
BAHR acts as legal advisor to Blackstone in connection with the Transaction.
ABG Sundal Collier acts as financial advisor and Wikborg Rein as legal advisor to Agasti in connection with the Transaction.
For further information:
Kathryn Moore Baker, chairman of the board of Agasti Holding ASA, phone +47 905 44 557
Jørgen Pleym Ulvness, CEO of Obligo, phone +47 906 67 877
Tor Arne Olsen, Communications officer of Obligo, phone +47 900 90 470.
This information is mandatory in accordance with the Norwegian Securities Trading Act Norway § 5-12.