The Board of Directors of Tritax Big Box REIT have announced that DBS HoldCo, a wholly-owned subsidiary of the Company, has conditionally agreed to acquire an 87%. economic interest in db Symmetry, which owns one of the UK’s largest strategic land portfolios for the development of big box real estate assets and related logistics facilities.
Created in 1996, db Symmetry has evolved to become one of the leading independent privately owned logistics development companies in the UK.
The enterprise value attributed to db Symmetry by the Acquisition is £370 million, subject to certain adjustments in respect of cash, debt, working capital, tax and other operational liabilities.
The portfolio of New Assets includes both consented and strategic land, offering the Company phased access to a total new land portfolio of over 2,500 acres which the Board, the Proposed Director and the Manager believe will be capable of delivering approximately 38.2 million s. ft of big box assets across key logistics locations in the UK (subject to planning, as necessary), complementing the company's existing portfolio of 29.8 million sq ft.
The consideration for the acquisition will be approximately £202.4 million in cash (in respect of 69.1%. of the equity value of db Symmetry) and approximately £52.6 million in Consideration Shares (in respect of 17.9 per cent. of the equity value of db Symmetry) to be issued to DV4 Properties and DBS Senior Management following completion of the Acquisition at a price per share equal to the Issue Price. DBS HoldCo will also procure the repayment of approximately £67.7 million of deep discounted bonds owed by db Symmetry to DV4 Properties and certain of its affiliates, which have been used to fund land acquisitions, construction, developments and associated costs in relation to the portfolio of New Assets to date.
To ensure long-term alignment between DBS senior Management and the company, DBS senior management will retain a 13% economic interest in db Symmetry following completion of the Acquisition which will be satisfied by the issuance of B Shares and C Shares in DBS HoldCo, representing consideration for the acquisition of approximately £38.1 million.
In order to fund the acquisition and further investments in accordance with its Investment Policy, the Company is proposing to raise approximately £250 million (before expenses) through the Issue which comprises the Placing and the Open Offer, of, in aggregate, 192,291,313 New Ordinary Shares at an Issue Price of 130 pence per New Ordinary Share. The Acquisition is expected to complete on 19 February 2019.
Jefferies International Limited and Akur are acting for the Company in relation to the Issue and Lazard & Co is acting for the company in relation to the acquisition.
Any capitalised terms used but not otherwise defined in this announcement have the meaning set out in Appendix II to this announcement.
RPA Perspective The Board, the Proposed Director and the Manager believe that, as a result of the scarcity of land at major logistics locations in the UK, the portfolio of New Assets will provide a significant commercial and competitive advantage for the REIT Group in the future.
The Directors and the Proposed Director believe that the principal benefits of the Acquisition to Shareholders will be as follows:
Large pipeline for the short to long term
The portfolio of New Assets provides the potential to add approximately 38.2 million sq. ft. of new logistics and Big Box assets to the Company's Portfolio.
The Acquisition represents interests in land or options over land totalling over 2,500 acres, of which 248 acres or 3.8 million sq. ft. has planning consent for logistics use and the remaining balance is progressing through the planning process.
Under current plans, this equates to 26 schemes for the development of Big Box assets and related logistics facilities.
Currently, five assets totalling approximately 600,000 sq. ft. are currently under construction1, all due for completion within the next six months, with plans for the on-going development of the rest of portfolio of New Assets extending out to the end of 2028.
Yield on cost significantly higher than valuation yield.
