Oaktree acquires Spanish developer for €882m

US fund Oaktree Capital Management has acquired Spanish developer Solvia Desarrollos Inmobiliarios (SDIN) Residential together with a portfolio of real estate assets from Iberian bank Banco Sabadell for €882 mln.

The deal for the 100% stake in the company was executed by an entity controlled by funds managed by Oaktree Capital Management. The firm's assets chiefly comprise land for development.

The sale of SDIN is the latest in a series of deals carried out by Sabadell to cash in on its real estate business, including its asset management subsidiary, Solvia Servicios Inmobiliarios.

In July 2018, the bank agreed to transfer property assets worth more than €12 bn to Cerberus and Deutsche Bank, initially leaving out its asset management division.

Then last December, Sabadell divested an 80% share in Solvia Servicios to Lindorff, a company belonging to Swedish investment firm Intrum AB group, for around €300 mln.

More recently, Sabadell was able to sucessfully offload a portfolio of €2.4 bn non-performing loans to Deutsche Bank.

SDIN, the real estate firm's development arm now sold to Oaktree, was a newer subsidiary carved out from Solvia. Rothschild had been given the mandate to find a buyer. According to media reports, both Cerberus and Canada's CCPIB were in the running to acquire the firm.

Sabadell has been working with Oaktree on a Spanish house-building joint venture since 2018, held 20% by a Sabadell subsidiary and 80% by Oaktree. An initial €100 mln deal saw the venture acquire a land bank from Iberdrola.

Sabadell said that the sale of SDIN would generate a profit of €23 mln after tax for the year, with a positive impact on its common equity tier 1 capital ration of seven basis points.

Investment giant Oaktree also became a takeover target earlier this year. In March, Brookfield Asset Management said it had agreed to buy a majority stake in the firm to create an investment group that would rival global industry leader Blackstone.

According to the terms of the deal, Toronto-based Brookfield will acquire a 62% stake in Oaktree in a cash and stock deal worth $4.7 bn (€4.2 bn). Together the firms will have around $475 bn assets under management and $2.5 bn of annual fee-related revenue.

Oaktree received written consensus for the deal from its founders in June, announcing that the deal is likely to close in the third quarter of 2019. Both Oaktree and Brookfield are expected to continue to operate as independent businesses after the merger.


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