RCS - Aareal Bank AG - Disposal

Mediobanca Banca Di Credito Finanziario SpAAnnouncement

24/06/2024 10:00

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RNS Number : 5704T  Aareal Bank AG  24 June 2024

 Aareal Bank AG / Key word(s): Disposal

Aareal Bank and Advent International to sell Aareon to TPG for approximately
 € 3.9 billion

24.06.2024

The issuer is solely responsible for the content of this announcement.

Aareal Bank and Advent International to sell Aareon to TPG for approximately
 € 3.9 billion

 ·      Transaction will establish Aareon as an independent company
 majority owned by TPG and CDPQ as minority co-investor

 ·     Aareal Bank and Aareon to continue to cooperatively support their
 clients following the transaction

 ·     Gain on sale to be booked in Aareal Bank Group with closing in H2
 2024, most transaction-related costs with signing in Q2

 Wiesbaden, 24 June 2024 - Aareal Bank and Advent International ("Advent")
 today announced that they have entered into an agreement with TPG and CDPQ for
 them to acquire Aareon, a European provider of Software-as-a-Service (SaaS)
 solutions for the property industry. The financial terms of the sale are based
 on an enterprise value for Aareon of approximately € 3.9 billion, valuing
 Aareal Bank's equity stake in Aareon at approximately € 2.1 billion. Closing
 is expected to take place in the second half of 2024, subject to customary
 closing conditions and approvals.

 The transaction and partnership with TPG will provide Aareon access to
 additional, dedicated resources and expertise to drive innovation and further
 growth. TPG will invest in Aareon through TPG Capital, the firm's U.S. and
 European private equity platform, in consortium with CDPQ, a global investment
 group, who will co-invest alongside TPG for a minority interest in Aareon.
 Advent will continue its involvement in Aareon with the investment of new
 equity for a minority interest in the standalone company.

 With its Property Management System, Aareon promotes efficient and sustainable
 property management and maintenance. The company's portfolio enables seamless,
 automated end-to-end processes connecting property managers and owners across
 the residential and commercial real estate sectors. The company is
 headquartered in Mainz, Germany.

 Jochen Klösges, Chief Executive Officer of Aareal Bank and Chairman of the
 Supervisory Board of Aareon, said: "We are pleased to have found new owners
 for Aareon who, thanks to their financial strength and pronounced industry
 experience, are well positioned to propel Aareon into its next major step of
 evolution. Over the past few years, we successfully developed Aareon into a
 'Rule of 40' company, that has demonstrated impressive organic and inorganic
 growth. We look forward to maintaining our successful collaboration through
 our joint venture, First Financial Software, which not only fortifies our
 long-term partnership with Aareon but also opens up further growth prospects
 for all parties involved."

 Flavio Porciani, Partner at TPG, said: "For many years, we have admired
 Aareon's position as a leader in the European property management industry and
 are thrilled to partner with the Aareon team and our fellow investors to build
 on the successes of the business as a standalone company. The need for
 comprehensive property management solutions is growing amid a trend towards
 digitalisation of real estate workflows and an increasingly complex regulatory
 environment. Aareon's platform is built to support this evolution, providing
 owners and managers an integrated, modern system that improves connectivity
 and streamlines business operations."

 Jeff Paduch, Managing Partner of Advent International and Supervisory Board
 Member of Aareon, commented: "We are proud to have supported the leadership
 team and employees of Aareon in their successful transformation, which is
 culminating in one of the largest software buyouts in Europe in 2024. The
 company is well positioned to continue to lead innovation for its customers in
 the European housing ecosystem and is on a path of sustainable growth with
 exciting opportunities ahead for all stakeholders."

 Harry Thomsen, Chief Executive Officer of Aareon, said: "This transaction
 marks a milestone in the development of Aareon. Thanks to the strong support
 of our owners Aareal Bank and Advent International, the company has made
 excellent progress in recent years. Now, we have reached a point where we can
 take the next step in our development. We are in an ideal position to capture
 further growth opportunities and welcome TPG and CDPQ as experienced and
 strong new partners."

 Following the transaction, Aareal Bank and Aareon will continue to seamlessly
 cooperate to support their clients through their joint venture First Financial
 Software. First Financial Software provides clients with specialist expertise
 around payment software solutions for the property sector and related
 industries.

 Significant gain on sale after transaction related costs expected in 2024

 The sale of Aareon will lead to a significant gain on sale net of
 transaction-related costs in Aareal Bank Group of approximately € 2 billion.
 The gain will be booked upon closing, which is expected in the second half of
 2024. Meanwhile, most transaction-related costs of around € 150 million will
 already have to be recognised in the second quarter, coinciding with the
 signing of the transaction. The gain on sale net of transaction-related costs
 had not been considered in Aareal Bank Group's previous guidance for the 2024
 financial year, which will be adjusted upwards. In addition, Aareon will be
 reported as a discontinued operation according to IFRS 5 starting in the
 second quarter until closing.

 Aareal Bank's banking business excluding Aareon is well on track to achieve
 its operating target of € 250 million to € 300 million for the 2024
 financial year. The Bank alone generated around € 92 million of consolidated
 operating profit in Q1 2024 and accounted for an operating profit of € 221
 million in 2023. The Group's Common Equity Tier 1 ratio (Basel IV phase-in
 ratio) stood at 19.7 per cent at the end of the first quarter of 2024.

 Arma Partners acted as lead financial advisor and Goldman Sachs acted as
 financial advisor to Advent International and Aareal. CMS served as legal
 counsel for Aareal while Weil, Gotshal & Manges LLP provided legal advice
 to Advent International. Morgan Stanley & Co. International Plc acted as
 financial advisor to TPG and CDPQ and Kirkland & Ellis LLP served as legal
 counsel.

 Contacts for the media:

 Aareal Bank

 Margarita Thiel

Phone: +49 611 348 2306

Mobile: +49 171 206 9740
 margarita.thiel@aareal-bank.com (mailto:margarita.thiel@aareal-bank.com)

 Christian Feldbrügge

Phone: +49 611 348 2280

Mobile: +49 171 866 7919
 christian.feldbruegge@aareal-bank.com
 (mailto:christian.feldbruegge@aareal-bank.com)

 Advent

 Olaf Zapke

Mobile: +49 170 7641971
 olaf.zapke@fgsglobal.com (mailto:olaf.zapke@fgsglobal.com)

 TPG

 James Madsen and Michael Russell

Phone: +44 20 7952 2000
 tpg@greenbrookadvisory.com (mailto:tpg@greenbrookadvisory.com)

 Contact for investors:

 Aareal Bank AG - Investor Relations

Phone: +49 611 348 3009
 ir@aareal-bank.com (mailto:ir@aareal-bank.com)

 About Aareal Bank Group

 Aareal Bank Group, headquartered in Wiesbaden, is a leading international
 property specialist. The Bank uses its expertise to identify trends,
 challenges and opportunities at an early stage, and to exploit them for the
 benefit of its stakeholders. Aareal Bank Group provides smart financings,
 software products, and digital solutions for the property sector and related
 industries, and is present across three continents, Europe, North America and
 the Asia/Pacific region. Aareal Bank Group's business strategy focuses on
 sustainable business success, with environmental, social and governance (ESG)
 aspects as an integral part of this strategy.

 Aareal Bank AG comprises the business segments Structured Property Financing,
 Banking & Digital Solutions, and Aareon. The Structured Property Financing
 segment encompasses all of Aareal Bank Group's property financing and funding
 activities. Here, the Bank supports its clients in making large-volume
 commercial property investments. The investment properties mostly comprise
 office buildings, hotels, shopping centres, logistics and residential
 property, as well as student apartments. In the Banking & Digital
 Solutions segment, Aareal Bank Group supports businesses from the housing,
 property management and energy industries as a digitalisation partner -
 combining extensive advisory services and product solutions with traditional
 corporate banking services and deposit-taking. Its subsidiary Aareon, Europe's
 trusted provider of SaaS solutions for the property industry, represents the
 third business segment. Committed to connecting people, process, and property,
 Aareon brings the ecosystem closer together. Aareon's Property Management
 System promotes efficient property management and maintenance, enabling
 superior digital experiences for everyone involved.

 About Advent International

 Founded in 1984, Advent International is one of the largest and most
 experienced global private equity investors. The firm has invested in over 420
 private equity investments across 43 countries, and as of December 31, 2023,
 had over €84 billion in assets under management. With 15 offices in 12
 countries, Advent has established a globally integrated team of over 302
 private equity investment professionals across Europe, North America, Latin
 America, and Asia. The firm focuses on investments in five core sectors,
 including business and financial services; health care; industrial; retail,
 consumer, and leisure; and technology. For 40 years, Advent has been dedicated
 to international investing and remains committed to partnering with management
 teams to deliver sustained revenue and earnings growth for its portfolio
 companies.

 For more information, visit

Website: www.adventinternational.com (http://www.adventinternational.com/)

LinkedIn: www.linkedin.com/company/advent-international
 (http://www.linkedin.com/company/advent-international/?viewAsMember=true)

 About TPG

 TPG is a leading global alternative asset management firm, founded in San
 Francisco in 1992, with $224 billion of assets under management and investment
 and operational teams around the world. TPG invests across a broadly
 diversified set of strategies, including private equity, impact, credit, real
 estate, and market solutions, and our unique strategy is driven by
 collaboration, innovation and inclusion. Our teams combine deep product and
 sector experience with broad capabilities and expertise to develop
 differentiated insights and add value for our fund investors, portfolio
 companies, management teams, and communities. For more information, visit
 www.tpg.com (http://www.tpg.com) .

 About CDPQ

 At CDPQ, we invest constructively to generate sustainable returns over the
 long term. As a global investment group managing funds for public pension and
 insurance plans, we work alongside our partners to build enterprises that
 drive performance and progress. We are active in the major financial markets,
 private equity, infrastructure, real estate and private debt. As at December
 31, 2023, CDPQ's net assets totalled CAD 434 billion. For more information,
 visit cdpq.com (https://www.cdpq.com/en) , consult our LinkedIn or Instagram
 pages, or follow us on X.

 CDPQ is a registered trademark owned by Caisse de dépôt et placement du
 Québec and licensed for use by its subsidiaries.

 About Aareon

 Aareon is Europe's trusted provider of SaaS solutions for the property
 industry, leading the charge towards a digital future.

 Passionately committed to connecting people, process, and property, Aareon
 brings the ecosystem closer together. Our Property Management System, powered
 by smart software solutions, promotes efficient property management and
 maintenance, enabling superior digital experiences for everyone involved. In
 our continuous pursuit of innovation, Aareon remains the industry's reliable
 partner, inspiring positive change for sustainable spaces for all.

24.06.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS News
 - a service of EQS Group AG.

The issuer is solely responsible for the content of this announcement.

The EQS Distribution Services include Regulatory Announcements,
 Financial/Corporate News and Press Releases.
 Archive at www.eqs-news.com

 Language:     English
 Company:      Aareal Bank AG
               Paulinenstr. 15
               65189 Wiesbaden
               Germany
 Phone:        +49 (0)611 348 - 0
 Fax:          +49 (0)611 348 - 2332
 E-mail:       aareal@aareal-bank.com
 Internet:     www.aareal-bank.com
 ISIN:         DE000A37FT90
 WKN:          A37FT9
 Listed:       Regulated Unofficial Market in Hamburg, Hanover; Stockholm
 EQS News ID:  1931057

 

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