Student housing operator Unite Group has completed the acquisition of rival, Liberty Living.
News of the deal first leaked last week, prompting Unite to issue a statement which indicated the value of the transaction to be £1.4 bn (€1.54bn) – in line with Liberty’s net asset value.
The seller was Canada Pension Plan Investment Board. Liberty Living has over 24,000 beds under management across 51 residences and partnerships with more than 40 educational institutions.
The transaction was partly funded by equity of up to 10% of Unite’s current issued share capital, with the company maintaining its existing leverage targets. Following completion of the purchase, Unite announced a proposed placing of 26,353,664 new ordinary shares to part fund the cash component of the acquisition.
Richard Smith, CEO of Unite, said: ‘This is a transformative acquisition which brings together the best of two companies with a wealth of expertise and experience in delivering for students and university partners.
‘By combining two highly complementary portfolios, the enlarged group will be well positioned to meet the growing need for affordable, high quality student accommodation in university towns and cities where demand is strong. This, combined with our best-in-class operating platform, will mean more choice for universities and an enhanced service and welfare offer for students.
´Backed by a conservative capital structure, this acquisition accelerates and extends our earnings growth and provides opportunities to further enhance total shareholder returns.´
Paul Mullins, CEO of Liberty Living, said: ‘Today’s announcement is testament to the hard work of the Liberty Living team, over the last four years. Since the business was acquired by CPPIB, we have grown beds under management and net assets. We have also substantially driven our performance by enhancing operational efficiency and improving cap-ex deployment, while maintaining excellent student service quality.
‘In addition to this we have also invested heavily in health and safety initiatives across the estate, remediating all ACM cladding and achieving the first accreditation for PAS7 in the student accommodation sector and the first PAS7 national accreditation of any business.’