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EQT AB said Wednesday it agreed to pay €6.8 billion ($7.5 billion) to acquire Baring Private Equity Asia (BPEA) to tap into rapid private markets growth in the region and increase its global presence.
EQT
EQT,
shares rallied 11.6% on Wednesday after the private equity firm said the transaction would immediately add high single-digit figures to its earnings per share.
EQT said it expects Asian private markets to grow at nearly twice the rate of global private markets and that investors “are set to materially increase their private markets allocations in the region.”
Expanding its presence in Asia has been a strategic priority for EQT, the firm said.
EQT plans to rebrand the combined Asian private capital business as BPEA EQT Asia, to be led by BPEA founder and CEO Jean Eric Salata and BPEA’s senior management team. Salata will also join EQT’s executive committee.
The purchase price included 191.2 million new ordinary EQT shares, valued at €5.3 billion and €1.5 billion in cash.
All told, Baring Private Equity Asia currently manages about € 17.7 billion ($19.5 billion) and is currently tapping capital from Private Equity Fund VIII, which invests in mid cap and large cap companies in Asia. Founded in 1997 and based in Hong Kong, BPEA operates out of 10 regional offices and also employs real estate and growth equity teams.
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EQT CEO and managing partner Christian Sinding said the acquisition will provide the firm with “a step-change in our global reach with immediate Pan-Asian presence at scale.”
The additional of BPEA represents a “perfect cultural and ideological fit with EQT,” Sinding said.
Once the deal closes as expected in the fourth quarter, EQT Private Capital will be comprised of two major units, BPEA EQT Asia and EQT Private Capital Europe & North America.
EQT will combine BPEA’s real estate investing unit with EQT Exeter, which it acquired in April, 2021. In January, EQT Exeter acquired Bear Logi.
EQT will be operating in 25 countries representing 80% of global gross domestic product after the deal closes.
As part of the $7.5 billion acquisition of BPEA, EQT agreed to pay $1.1 billion to minority BPEA shareholder Affiliated Managers Group Inc.
AMG,
AMG CEO Jay C. Horgen said its ownership stake in BPEA “has resulted in a successful outcome for all stakeholders.”
AMG acquired its 15% interest in BPEA for $187.5 million in 2016.
Shares of AMG are down 20.8% in 2022, compared to a drop of 10.6% by the S&P 500.
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