Infrastructure boutique Whitehelm Capital has been acquired by PATRIZIA, with Challenger's Fidante set to get $50 million for its 30% stake in Whitehelm.
PATRIZIA has entered a share purchase plan to acquire the entire issued share capital of Whitehelm. So far, Whitehelm has been owned 70% by its staff and 30% by Challenger's multi-boutique business Fidante Partners.
PATRIZIA said its total initial purchase price is EUR 67 million paid in cash and company treasury shares. Challenger's share of the sale price is in cash.
Challenger expects to record a roughly $44 million gain on sale while derecognise $5 billion of funds under management. CGF said its funds management business's earnings expectations remain unchanged after the sale.
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For up to two years after completion, Fidante will provide ongoing administration and distribution services to Whitehelm under its new owner.
"The sale will deliver value to Challenger's shareholders whilst ensuring continuity for Whitehelm's clients and business operations," Challenger chief executive funds management Nick Hamilton said.
"Through our market-leading multi-boutique business, Fidante Partners, we seek to build longstanding relationships and benefit from their long-term growth.
"While it is not our strategy to sell our interest in our boutique partners, PATRIZIA's offer provided a unique and compelling opportunity for Challenger to deliver value for shareholders," he said, adding Fidante has a strong pipeline of future boutique opportunities.
The Whitehelm acquisition triples PATRIZIA's infrastructure AUM to about EUR 5 billion, broadens its footprint in Asia Pacific and accelerates its goal to have net-zero carbon emissions by 2040, the firm said.
PATRIZIA is aiming for a mid-term goal of segment to EUR 15 billion to EUR 20 billion in the segment.
Whitehelm employs about 60 investment staff and was set up in 2014 Challenger and Access Capital Advisers merged their infrastructure operations.
"We are really excited about partnering with PATRIZIA. They represent a perfect cultural and strategic fit and will enable us to expand our client reach especially in Europe, providing access to their extensive client base," Whitehelm chief executive Graham Matthews said.
The transaction is expected to close in first quarter next year.
Whitehelm was advised by Berkshire Global Investors on the sale.