Six Bidco Ltd to acquire Sigma Capital Group for £188.4 million

LONDON, UK: The boards of Six Bidco Ltd and Sigma Capital Group plc have reached agreement; accordingly Six Bidco will acquire entire share capital of Sigma for £188.4 million on a fully diluted basis, a news release said.

Under the terms of the acquisition, each Sigma Shareholder will be entitled to receive 202.1 pence in cash for each Sigma Share.

During late 2020, in light of the strategic progress Sigma had made during the year, notwithstanding the COVID-19 crisis, Sigma’s Directors decided to review the strategic options and relative benefits of the various routes available to the business to fund its future growth and maximise shareholder value.

Recognising the attractiveness of Sigma as a platform for investors with access to greater capital availability, the Sigma Directors decided to appoint Rothschild & Co to run a private sale process for Sigma in order to maximise value for Sigma’s shareholders.

This process attracted participation from multiple well-funded parties and Sigma provided interested parties with access to due diligence information through a virtual data room and a series of management sessions.

Following a period of review, further discussions with its advisers and a thorough evaluation of the proposals received by Sigma, including follow-up discussions with the relevant interested parties, the Independent Sigma Directors believe that the all-cash offer from Bidco represents the most attractive option for all Sigma Shareholders in terms of value, the form of consideration offered and execution certainty. Discussions with all other interested parties have terminated.

The Independent Sigma Directors believe that Sigma can continue to execute its current strategy by leveraging its strong brand, relationships, and expertise. However, in order to deliver its next phase of growth, Sigma would require consistent access to capital to invest in scale into UK PRS product and further grow the business through forming new housebuilder partnerships, expanding operations into new regional markets and widening its rental product offering.

The Independent Sigma Directors believe the Acquisition will accelerate the delivery of these strategic benefits to Sigma’s business at a rate which would be otherwise difficult to achieve as a standalone AIM-listed company.

PineBridge Benson Elliot believes that Sigma is a market-leading vertically integrated PRS delivery and operating platform, which benefits from a leading position in the rapidly growing UK single-family rental market.

Having delivered c.5,400 homes to date, Sigma’s platform has recently entered into new long-term partnerships with housebuilder delivery partners and end investors in the UK, with expansion plans to deploy further capital towards new PRS opportunities.

Bidco aims to build on this solid foundation, and intends to continue to grow the business and the success already achieved through Sigma’s partnerships with PRS REIT and EQT Real Estate by providing capital backing, investment, strategic support and expertise in Sigma’s target geographic markets. Sigma and Bidco believe that their proposed combination will allow Sigma to expand upon its historical levels of PRS homes delivery.

Over its history, PineBridge Benson Elliot has built a track record of successfully acquiring and scaling real estate investments in Europe in close partnership with talented and driven management teams. PineBridge Benson Elliot believes the Acquisition will bring clear strategic benefits in delivering the shared ambition of developing large scale and high-quality single-family homes at affordable rents in the UK, and that its financial and operational backing could therefore give Sigma greater scale to invest in the growing residential rental market.

Sigma is a PRS, residential development, and urban regeneration specialist, with offices in Edinburgh, Manchester and London. Sigma’s principal focus is on the delivery of large scale housing schemes for the private rented sector.

Sigma has a well-established track record in assisting with property related regeneration projects in the public sector, acting as a bridge between the public and private sectors.

Bidco is a limited company registered in England and Wales and was incorporated on 31 May 2021. Bidco was formed for the purposes of the Acquisition and is a wholly-owned indirect subsidiary of investment funds managed by PineBridge Benson Elliot.

Bidco has not traded since its date of incorporation, nor has it entered into any obligations other than in connection with the Acquisition.

PineBridge Benson Elliot is a pan-European real estate private equity specialist, applying two decades of investment experience, deep market knowledge and in-house operational expertise to generate sustained investment outperformance.

The UK-based, FCA-regulated fund manager has c.$3.2 billion of managed equity and holds a diversified real estate portfolio, currently comprised of office, retail, hotel and residential assets in the UK, France, Germany, Italy, Spain, Belgium and Central Europe.

Founded in 2005 as Benson Elliot Capital Management LLP, Benson Elliot was acquired in December 2020 by PineBridge Investments, a private, global asset manager with $133.0 billion in assets under management (as at March 2021).

www.pinebridge.com

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