Soul Patts to pocket $1.89bn from Brickworks divestment

Washington H. Soul Pattinson & Co is set to receive $1.89 billion after agreeing to divest its stake in Brickworks' industrial joint venture property trusts to Goodman Group, freeing up capital for future investment opportunities.

The transaction will see Soul Patts sell Brickworks' investment to the Industrial JV Trust assets to the Goodman Australia Industrial Partnership (GAIP) and Goodman Group entities. The agreed sale price of $1.89 billion aligns with the value of the assets at the time of the recent combination between Soul Patts and Brickworks.

Soul Patts chief executive and managing director Todd Barlow said the transaction would provide the investment house with greater flexibility to pursue opportunities across local and global markets.

"This transaction provides an opportunity for Soul Patts to reallocate capital towards opportunities we are currently seeing a cross domestic and international markets," Barlow said.

"We believe greater liquidity and flexibility are an advantage in the current environment," he said.

The deal follows the completion of the combination between Soul Patts and Brickworks, which triggered certain change of control rights held by Goodman and GAIP under longstanding joint venture arrangements.

Despite the divestment, Soul Patts will maintain exposure to industrial property through the Brickworks Manufacturing Trust. Established in 2022, the trust houses a portfolio of manufacturing properties in which Brickworks retains a 50.1% interest alongside Goodman Group.

Barlow highlighted the longstanding relationship between the two organisations which stretches back more than two decades.

"Soul Patts and Goodman Group have a long and productive history, delivering significant value for both parties over many years. That relationship continues as joint venture partners in the Manufacturing Trust," he said.

The Industrial JV Trust arrangements were originally established in 2005 as part of Brickworks' strategy to unlock value from surplus land associated with its building products operations. Under the structure, Brickworks held a 50% interest in several industrial property join ventures alongside Goodman entities.

Completion of the transaction is expected in late June and is not subject to any conditions precedent or shareholder approval.