Student accommodation developer Unite Group has agreed to acquire Liberty Living Group Plc, a student accommodation business, from Liberty Living Holdings Inc., a wholly owned subsidiary of Canada Pension Plan Investment Board(CPPIB), for £1.4 billion ($1.8 billion), according to a company statement on Wednesday.
The Liberty Living portfolio is composed of 24,021 beds and was independently valued at £2.2 billion as at 31 May 2019.
The acquisition has been priced on a NAV-for-NAV basis for a total consideration of £1.4 billion. The consideration is comprised of a combination of cash and shares that will result in CPPIB receiving a stake of 20% in the enlarged group upon completion.
Unite Group also today announced a proposed placing of 26,353,664 new ordinary shares to part fund the cash component of the acquisition consideration.
”Approximately £240 million to be raised from the net proceeds of a proposed placing of 26.4 million new Unite shares and approximately £310 million to be drawn from Unite’s existing financing facilities and cash resources to part fund the cash consideration,” said in statement.
As part of the transaction, the Unite Student Accommodation Fund (“USAF”) will acquire Liberty Living’s properties in Cardiff for cash consideration of £253 million.
“This is a transformative acquisition which brings together the best of two companies with a wealth of expertise and experience in delivering for students and university partners. By combining two highly complementary portfolios, the enlarged group will be well positioned to meet the growing need for affordable, high quality student accommodation in university towns and cities where demand is strong,” said Richard Smith, Chief Executive Officer of Unite.