EQT VII recently signed an agreement with Bilfinger SE (Bilfinger) to acquire Bilfinger’s business segment Building and Facility subject to the receipt of customary regulatory approvals. The purchase price corresponds to an enterprise value of EUR 1.4 billion. It comprises a cash component and a deferred purchase price component with annual interest upon maturity.
As part of the agreement, Bilfinger has secured a share in the future exit proceeds of EQT from Building and Facility through an instrument similar to an earn-out. Building and Facility is the biggest real-estate service provider in the DACH region and also a leading player in the segment in the UK. It includes three divisions: Facility Services, Real Estate, and Building, and employs more than 20,000 people. The annual output volume generated amounts to around EUR 2.5 billion.
Building and Facility is set to continue to grow profitably with EQT VII as new owner. The European real-estate services sector is a promising market, which is set to benefit from the growth rate of outsourced real-estate services. Building and Facility is already the No.1 integrated Real Estate service provider in the DACH region and has strong market positions in the UK, Italy, the Netherlands, Poland and Turkey. Focus going forward lies on further developing the integrated services offering across its growing European platform.
“The plan is to expand Building and Facility’s already strong platform by organic growth as well as via acquisitions and to grow stronger than the market in Europe. The intention is to create a European leader in the real-estate services sector and EQT will invest in the company accordingly,” said Dr Andreas Aschenbrenner, Partner at EQT Partners, and Investment Advisor to EQT VII. “To achieve this, we look forward to working together with the experienced and successful management of all the three divisions,” he adds.
Interview with David Barclay of GSK Luxembourg SA:
Please tell me about your involvement in the deal?
As legal advisors to EQT of matters relating to Luxembourg companies law, prior to the closing of the transaction our involvement consisted of implementation and organisation of the acquisition structure, negotiation of transaction documentation relating to the transaction, and in particular the (equity and debt) instruments issued by the various Luxembourg entities being part of the acquisition structure, and various security arrangements granted in connection thereto.
At the closing of the transaction, our role involved introducing the funds flow to acquire the target, which was established inter alia by way of capital measures (for instance, an increase of share capital) at the relevant company level, including, as necessary, negotiation of a full restatement of the constitutive documents with the shareholders of each company to contain the most necessary terms of the transaction.
Post-closing, we are presently on-boarding the existing management team of the target to a management equity program.
Why is this a good deal for all involved?
The deal was innovative and a landmark deal for EQT and for all parties involved, as it provided new financial and know-how means to the target group to further propel their business activities and strategies.
What challenges arose? How did you navigate them?
Taking account of the size, nature and complexity of the transaction, overall it ran relatively smooth, of course subject to thorough negotiation, which always entails certain challenges. To a large extent however, these challenges were overcome due to the professional and forthcoming working approach applied by all parties involved, as well as their advisors.
Also, the fact that the seller was a large corporation, the shares of which are listed on a regulated market, as opposed to another private equity player meant that there were specific internal measures in place that influenced the closing steps to be performed. This was resolved by a pragmatic approach from all involved in order to further ensure the closing was completed without any considerable obstacles or undue delay.