EQT Private Capital Asia agrees $1.1 billion deal for PropertyGroup Guru, targets $12.5 billion capital raise
Hong Kong-headquartered EQT Private Capital Asia has entered into an agreement to acquire PropertyGuru Group, a leading real estate technology company in Southeast Asia (SEA), for US$1.1 billion in cash.
Major shareholders of PropertyGuru Group are TPG (through TPG Asia VI SF and TPG Asia VI SPV in its capacity as general partner of TPG Asia VI Digs), which owns approximately 26.5%, and KKR (through Epsilon Asia Holdings II), which owns approximately 29.6% of the Company. They have entered into voting and support agreements with the Company and EQT Private Capital Asia to support the merger.
PropertyGuru’s board of directors has unanimously approved the deal on the recommendation of a special committee and recommends that PropertyGuru shareholders approve the merger, according to an Aug. 16 statement.
The offer is equivalent to $6.70 per share and represents a 52 percent premium to PropertyGuru’s closing share price on May 21, 2024, the last unaffected trading day before media speculation about a possible transaction, and a 75 percent and 86 percent premium, respectively, to the company’s 30- and 90-day volume-weighted average share price for the period ending May 21, 2024, the announcement said.
The transaction is expected to close in the fourth quarter of 2024 or the first quarter of 2025 and is subject to closing conditions, including approval by PropertyGuru’s shareholders and receipt of regulatory approvals.
Upon completion of the transaction, PropertyGuru’s shares will no longer be traded on the New York Stock Exchange (NYSE) and PropertyGuru will become a private company. PropertyGuru’s headquarters will remain in Singapore.
Moelis & Company is acting as financial advisor to the Special Committee and Freshfields Bruckhaus Deringer is acting as legal advisor. Morgan Stanley Asia (Singapore) is acting as financial advisor to EQT Private Capital Asia and Ropes & Gray is acting as legal advisor to EQT Private Capital Asia. JP Morgan Securities Asia Private is acting as financial advisor to KKR and TPG and Latham & Watkin is acting as legal advisor to KKR and TPG.
PropoertyGuru Group plans to merge with subsidiaries of BPEA Private Equity Fund VIII, part of EQT AB, a purpose-driven global investment organization, following which the company will be acquired by EQT Private Capital Asia.
Growth potential
Founded in 2007, the company has a digital real estate marketplace in Singapore, Malaysia, Vietnam and Thailand. It listed on the NYSE in March 2022 and raised $254 million in a special purpose acquisition (SPAC) deal with Bridgetown 2 Holdings, backed by Richard Li and Peter Thiel.
Hari Krishnan, CEO and Managing Director of PropertyGuru Group, said in a statement: “We are excited to start this new chapter with EQT. This partnership follows years of transformative growth, supported by TPG and KKR, which have established us as the leading proptech platform in Southeast Asia.”
Krishnan added: “As we continue to innovate and deliver value to our consumers, customers and stakeholders across the region, EQT’s global expertise in building marketplaces and commitment to sustainable growth will further strengthen our vision of empowering communities to live, work and thrive in the cities of tomorrow.”
Janice Leow, Partner in the EQT Private Capital Asia Advisory team and Head of EQT Private Capital SEA, provided an outlook on the company’s future as a private company, stating: “PropertyGuru has firmly established itself as the leading real estate marketplace platform in SEA and we are deeply impressed by the strong foundation it has built over the past 17 years, as well as its talented team.”
Leow added: “We believe our offering provides compelling value and certainty to shareholders, while strategically positioning PropertyGuru to fully realize its long-term growth potential. With EQT’s extensive experience in technology, online classifieds and marketplaces, we aim to further strengthen PropertyGuru’s platform and drive innovation and deeper engagement with its consumers, customers and stakeholders.”
Buys Korean recycling company and aims to raise $12.5 billion
EQT Infrastructure VI has bought KJ Environment from Genesis Private Equity for an undisclosed sum. The idea is to establish “a scaled and diversified end-to-end waste treatment platform with a focus on plastics recycling and waste-to-energy in South Korea,” according to a press release.
KJ Environment is engaged in the recycling waste sorting, plastic recycling and energy from waste business. The company has operations in the greater Seoul area and serves catchment areas covering more than 50% of the country’s population and GDP.
The acquisition is EQT’s second infrastructure investment in South Korea.
Sang Jun Suh, Partner in EQT’s Infrastructure Advisory team, commented: “We look forward to leveraging EQT’s extensive experience in investing in sustainable waste and recycling solutions across geographies, combined with our strong local presence and industrial network, to help KJ Environment develop into a true market leader in the waste treatment space.”
The platform complements EQT’s global portfolio of companies active in the waste business and builds on EQT’s track record of supporting infrastructure companies in Asia Pacific. Since 2020, EQT Infrastructure has invested €5 billion (US$5.52 billion) of equity, including co-investments, in companies in Asia Pacific. The portfolio, managed by EQT’s Asia Pacific infrastructure team, employs around 11,000 people.
The transaction is subject to approval and is expected to close in the fourth quarter of 2024. EQT was advised on financial matters by JP Morgan, on legal matters by Kim & Chang and on financial and tax matters by PwC.
With this transaction, EQT Infrastructure VI is expected to be at 45-50%, subject to target fund size and customary regulatory approvals.
Meanwhile, EQT is seeking to raise around $12.5 billion for EQT Private Capital Asia’s BPEA Private Equity Fund IX.
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