Primewest, the ASX-listed real estate fund manager that made its first foray into agriculture in 2020, will merge with fellow listed fund manager Centuria Capital Group in a deal worth approximately A$600 million ($463 million; €385 million).
The firms announced this week that Centuria had entered into a bid implementation agreement to make an off-market takeover offer for 100 percent of Primewest’s shares to effect the merger. The deal will see the latter’s shareholders receive a cash consideration of A$0.20 per share and 0.473 Centuria shares per Primewest stock, equating to A$1.31 of value based on Centuria’s closing price on 16 April 2021.
Primewest’s directors, who own 53 percent of the company’s shares, will unanimously back the merger.
It will create a combined entity with approximately A$15.5 billion in assets under management, with property assets in the agriculture, offices, industrial, retail and healthcare sectors.
Centuria has no existing agriculture investments, and the firm highlighted in a presentation to shareholders the “enhanced diversification” it would gain from exposure to Primewest’s retail and agriculture assets.
Agriculture still makes up a relatively small proportion of Primewest’s assets. The Primewest Agricultural Fund, its first agriculture investment vehicle had around A$47 million in AUM at 31 December 2020, according to its half-year results published in February.
The fund’s target size was revealed to have risen to A$350 million in the firm’s half-year 21 results, following an institutional placement through which Primewest raised A$60 million.
Agri Investor understands it has since acquired Rolf Binder Winery and Vineyards from Accolade Wines in a sale-and-leaseback transaction. Accolade is owned by private equity firm Carlyle Group. The Australian Financial Review reported last week that Primewest had made further acquisitions to take the size of the fund to A$86 million, with the deals to be supported by a A$31.65 million raising.
Primewest declined to comment on the latest acquisitions and said it had made no public statement on any new capital raising.
In a statement, Centuria chairman Garry Charny said: “The proposed [merger] is consistent with Centuria’s dual strategy of asset acquisitions and corporate M&A, where this is sympathetic to Centuria’s business model. Primewest is a high-quality, well-established fund manager and the Centuria board looks forward to the successful completion of the merger and building on Centuria’s position as a leading Australasian property fund manager.”
Primewest first moved into agriculture last year with the acquisition of goFARM Asset Management, which granted it the management rights to the ASX-listed Vitalharvest Freehold Trust. It also acquired a stake in Vitalharvest at the same time.
After agreeing to sell its management rights and stake in Vitalharvest to Macquarie Infrastructure and Real Assets last year, a bidding war has erupted for the listed trust between MIRA and private equity firm Roc Partners. At the time of writing, Roc Partners is in pole position to win the takeover battle, having increased its bid to A$1.18 per unit, up from MIRA’s initial offer of A$1.00 per share.