Stockholm-listed Castellum has agreed to acquire Norrporten, another Swedish landlord, in the largest real estate transaction in the country since 2008.
Norrporten's owners, the Sweden national pension funds AP2 and AP6, will receive a total consideration of almost SEK 14 bn (€1.5 bn) on closing of the transaction.
The price is made up of SEK 10.4 bn in cash; 23.41 million Castellum shares valued at SEK 3.02 bn and dividend of SEK 464 mln. The cash purchase price will be financed by a fully-underwritten rights issue of SEK 6.5 bn and SEK 3.9 bn from existing and new interest-bearing debt facilities.
Castellum has SEK 45 bn of assets under management, making it one of the largest listed real estate companies in Sweden. The addition of Norrporten will lift the group's total portfolio to SEK 71 bn.
'The acquisition of Norrporten is a strong move forward in Castellum's long-term growth strategy. Norrporten has an attractive property portfolio that complements Castellum's existing portfolio in growth markets around Sweden and Denmark, and which adds properties in a number of new markets where Castellum is not already present,' said Castellum CEO Henrik Saxborn.
AP 2 was already a shareholder in Castellum, while AP 6 will be taking a stake in the company for the first time through the Norrporten transaction.
Pangea Property Partners advised Castellum in what is said to be the largest real estate transaction by investment volume in Sweden in almost eight years.
The record for the largest deal was set in 2008 when the AP funds 1 to 4 took over Sweden's largest property company, Vasakronan, from the Swedish state for SEK 41 bn. Vasakronan remains the largest property company in Sweden, reporting SEK 104 bn of assets under management at end-2015.
Aside from boosting Castellum's portfolio size considerably, the Norrporten acquisition strengthens its presence and market position in Stockholm, Helsingborg, Örebro and Jönköping, as well as in the Danish capital Copenhagen. Castellum will also make 'sizeable entries with attractively located properties' in the Swedish cities of Gävle, Sundsvall, Östersund, Umeå, Luleå and Växjö, the company said.
Carnegie Investment Bank and Pangea Property Partners are financial advisors and law firm Gernandt & Danielsson is providing legal advice to Castellum in connection to the transaction.