Blackstone acquires ACC in $12.8bn transaction

BY Fraser Tennant

In a transaction valued at $12.8bn, global investment business Blackstone Inc. is to acquire American Campus Communities (ACC), the largest developer, owner and manager of high-quality student housing communities in the US.

Under the terms of the definitive agreement, Blackstone will acquire all outstanding shares of common stock of ACC for $65.47 per fully diluted share in an all-cash transaction, including the assumption of debt.

ACC’s portfolio comprises 166 owned properties in 71 leading university markets, including Arizona State University, the University of Texas, Florida State University and the University of California, among many others. Moreover, ACC’s properties are high-quality, purpose-built student housing assets located within walking distance of their respective university campuses, with approximately 24 percent of ACC’s communities located on campus.

“Through our initial public offering (IPO), 18 years ago, we began our pioneering quest to transform the student housing sector into a mainstream, institutional asset class within the commercial real estate sector,” said Bill Bayless, co-founder and chief executive of American Campus Communities. “We have certainly accomplished that mission and are proud and excited to have our best-in-class company join Blackstone, the world’s largest alternative asset manager.”

A global leader in real estate investing, Blackstone’s real estate business was founded in 1991 and has $279bn of investor capital under management. The firm is the largest owner of commercial real estate globally, owning and operating assets across every major geography and sector, including logistics, residential, office, hospitality and retail.  

“ACC has a best-in-class portfolio and platform, built on longstanding relationships with some of the most distinguished and fastest growing universities in the country,” said Jacob Werner, co-head of Americas Acquisitions for Blackstone Real Estate. “Our capital will enable ACC to invest in its existing assets and create much-needed new housing in university markets.”

Unanimously approved by ACC’s board of directors and the independent special committee of ACC’s board, the transaction is expected to close in the third quarter of 2022, subject to approval by ACC’s shareholders and other customary closing conditions.

“This transaction represents the culmination of the passion and dedicated service of the ACC team to our student residents and university partners, while creating significant value for our shareholders,” concluded Mr Bayless. “Moving forward together, the combined synergies of our organisations will enable us to better serve our current and future residents and university partners.”

News: Blackstone to buy American Campus Communities for nearly $13 billion

Fight for Twitter intensifies amid ‘poison pill’ tactics

BY Richard Summerfield

The fight for control of social media giant Twitter has intensified in recent days as the company responds to the $43.3bn takeover offer from entrepreneur Elon Musk.

In early April, Mr Musk, the chairman of Tesla, announced that he had become Twitter’s largest stakeholder after quietly acquiring a 9.2 percent stake in the company in recent months. He was then offered a seat on the board, a move that was abruptly reversed after Mr Musk declined. He then made the offer to acquire the company outright.

Mr Musk informed Twitter last week that his $54.20-per-share all-cash bid for the company was his “best and final offer”, and that he would reconsider his position as a Twitter shareholder if it was rejected. He has claimed his offer would help “unlock” the company’s “extraordinary potential”. He also noted that he had made the offer because he believes it is important to have an “inclusive arena for free speech.” Furthermore, he said that if Twitter’s board of directors chose to reject the offer, it would be “utterly indefensible not to put this offer to a shareholder vote”.

In response to the offer, Twitter’s board unanimously approved a plan that would allow existing shareholders to buy stocks at a substantial discount in order to dilute the holdings of new investors. The ‘poison pill’ tactic is the clearest evidence so far that Twitter intends to fight the takeover. It would go into effect if a shareholder were to acquire more than 15 percent of the company in a deal not approved by the board and expires 14 April 2023. Every other shareholder aside from Mr Musk would be allowed to purchase new shares at half the market price, which stood at $45.08 at the end of trading on Thursday last week.

“The Rights Plan does not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interests of Twitter and its shareholders,” Twitter said in a statement.

In addition to Mr Musk’s takeover offer, Thoma Bravo, a technology-focused private equity firm that had more than $103bn in assets under management as of the end of December, is also believed to be exploring the possibility of putting together a bid for the company.                

Asset manager Vanguard Group said in a filing submitted recently to the Securities and Exchange Commission (SEC) that, as of 8 April, its funds now own a 10.3 percent stake in Twitter, making it the company’s largest shareholder.

Mr Musk is facing legal action over his Twitter share purchases, with one investor launching a potential class action lawsuit against him for failing to disclose his buy-up of shares before the required deadline to do so. Mr Musk is also facing several investigations by the SEC for his investment activities, including insider trading allegations related to his own tweets.

News: Twitter adopts 'poison pill' as challenger to Musk emerges

KKR agrees Barracuda deal

BY Richard Summerfield

KKR & Co has agreed to acquire cyber security firm Barracuda Networks from its private equity owner Thoma Bravo. While no financial terms were disclosed, the transaction is believed to be worth around $4bn, including debt.

The deal, which is expected to close by the end of the year, subject to customary conditions, is the latest in the increasingly active cyber security space. Dealmaking in the market has intensified over the last two years as remote working became the norm following the outbreak of the coronavirus (COVID-19) pandemic. Russia’s invasion of Ukraine has also caused companies to redouble their efforts on the cyber security front amid a rise in cyber attacks.

Founded in 2003, Barracuda is a developer of cyber security solutions, including email protection, app and cloud defences, data management and network security. The company caters to approximately 200,000 customers worldwide across a variety of industries, including education, government, financial services, health care, retail, consumer goods and manufacturing. Barracuda tends to focus on small to medium-sized businesses.

Thoma Bravo acquired Barracuda in 2017 for $1.6bn. Since that time, the company has enjoyed growth of over $500m in revenue.

“We believe that with the support of KKR, we will continue to invest in growth and foster a culture that gives our team the resources and inspiration to continue to create and deliver the next generation of leading cybersecurity solutions for our customers and partners,” said Hatem Naguib, chief executive of Barracuda. “We are very appreciative of Thoma Bravo’s support and very excited to be working with KKR on this next phase of Barracuda’s journey.”

“We continue to see cybersecurity as a highly attractive sector and are excited to back a clear leader in the space,” said John Park, head of Americas technology private equity at KKR. “Given its proven track record of growth and innovation, we believe that Barracuda has the right team and model to capture business in this growing market.”

“Barracuda has built an impressive portfolio of solutions that are helping SMEs around the world protect their data and address critical security challenges,” said Bradley Brown, managing director at KKR. ”We see a tremendous opportunity for long-term growth as these businesses continue to invest more in cybersecurity and we look forward to helping Barracuda scale and deliver next generation products that meet this growing need.”

The investment in Barracuda builds upon KKR’s experience investing in the cyber security sector globally, with investments including Ping, Cylance, DarkTrace, ForgeRock, NetSPI and Optiv, among others.

News: KKR to buy cybersecurity firm Barracuda from Thoma Bravo in deal worth about $4 bln

Goldman Sachs acquires NN Investment Partners in €1.7bn deal

BY Fraser Tennant

In a €1.7bn transaction that “advances it commitment to sustainability”, US multinational investment bank and financial services company Goldman Sachs has acquired Dutch-based asset manager NN Investment Partners.

Upon completion, NN Investment Partners will be integrated into Goldman Sachs Asset Management, with the company’s more than 900 employees joining the Goldman Sachs family and the Netherlands becoming an important location in Goldman Sachs’ European business.

Moreover, the acquisition brings Goldman Sachs’ assets under supervision to approximately $2.8 trillion and affirms its position as a top five active asset manager globally, with leading franchises in fixed income, liquidity, equities, alternatives and insurance asset management.

Headquartered in The Hague, NN Partners manages approximately $340bn in assets for institutions and individual investors worldwide, with offices in 15 countries across Europe, North America, Latin America, Asia and the Middle East.

Highly complementary to Goldman Sachs Asset Management’s existing European footprint, NN Investment Partners adds new capabilities and accelerating growth in products such as European equity and investment grade credit, sustainable and impact equity, and green bonds.

In addition, the firm has been successful in incorporating environmental, social and governance (ESG) factors across its product range, with ESG criteria integrated into approximately 90 percent of assets under supervision. Goldman Sachs Asset Management intends to leverage this expertise to complement its existing investment processes, helping to deepen ESG integration across its product range and deliver on sustainable investing priorities.

“This acquisition advances our commitment to put sustainability at the heart of our investment platform,” said David Solomon, chairman and chief executive of Goldman Sachs. “It adds scale to our European client franchise and extends our leadership in insurance asset management.”

As part of the transaction, Goldman Sachs Asset Management has entered into a long-term strategic partnership agreement with NN Group, the parent company of NN Investment Partners, to manage an approximately $180bn portfolio of assets, reflecting the strength of the business’ global insurance asset management capabilities and alternatives franchise.

Mr Solomon concluded: “We are excited to welcome the talented team at NN Investment Partners, a centre of excellence in sustainable investing, to Goldman Sachs and together we will focus on delivering long-term value to our clients and shareholders.”

News: Goldman pays 1.7 billion euros for Dutch-based asset manager

New heights: Aeromexico exits Chapter 11

BY Fraser Tennant

Following the successful conclusion of a 21-month financial restructuring process, Mexican carrier Aeromexico has emerged from its Chapter 11 bankruptcy.

The financial reorganisation process is being closed after the carrier capitalised and obtained over $3.7bn in unsecured loans, debtor-in-possession (DIP) financing and new capital contributions.

Aeromexico began the Chapter 11 process due to the impact of the coronavirus (COVID-19) pandemic worldwide, making it the third Latin American carrier to employ the protection of the US bankruptcy code, after Avianca and LATAM Airlines Group.

“This is an exciting time for Aeroméxico and we are ready to soar to new heights as we emerge from Chapter 11,” said Andres Conesa, chief executive of Aeroméxico. “We look forward to starting a new chapter in our company’s history, backed by a sound financial base, solid capital structure, and investors who have full confidence in our future.”

Throughout the restructuring process, Aeroméxico has worked to expand its operations sustainably, opening six new routes, restarting service on more than 30, and increasing its total seat offering by more than 320 percent compared to June 2020 figures.

The company currently flies 84 national and international routes, connecting bustling cities in Mexico, such as Guadalajara and Monterrey, to the European market through Madrid. In 2022, Aeroméxico plans to continue building on this momentum, including the restart of services to London.

“Thanks to the dedication of the entire talented Aeroméxico family, as well as the support, trust and empathy of our customers, unions, authorities, suppliers and business partners, we have successfully completed this process,” added Mr Conesa.

In addition, Aeroméxico has formed a new board of directors, comprised of a majority of Mexican nationals and independent members in full compliance with Mexican foreign investment law and regulations.

Mr Conesa concluded: “As we move forward, we will not only continue to streamline our company to become even more sustainable, resilient and competitive, but we will also significantly expand our network and fleet – all while offering excellent service and maintaining our position as Mexico’s flagship airline.”

News: Aeroméxico exits Chapter 11 bankruptcy