LONDON, UK: Sirius Real Estate Limited has agreed to acquire Helix Investments Limited (the holding company of the BizSpace business) from Värde Partners for a cash consideration of c.£245 million, based on an enterprise value of £380 million.
BizSpace is a leading provider of regional flexible workspace, offering light industrial, workshop, studio and out of town office units to a wide range of businesses across the UK. The Acquisition constitutes a Class 2 transaction pursuant to the Listing Rules and a category 2 transaction in terms of the JSE Listings Requirements.
The board of directors of the Company believes the acquisition of BizSpace represents a highly attractive and strategically important opportunity that allows Sirius to enter, at scale, an under-served wider UK market with a one-step acquisition of an established platform.
Furthermore, the Board believes that the Acquisition presents an opportunity for the Company to replicate the success of the Sirius model in another European geography, providing Sirius’ shareholders with an opportunity for significant value creation and further long-term growth potential.
The Acquisition consideration will be funded by a combination of new and existing debt together with the proceeds of a proposed fundraise, which is expected, in aggregate, to raise gross proceeds of c.£135 million, comprising a non pre-emptive placing of new Ordinary Shares in the Company to institutional investors including in the UK, a non pre-emptive placing of new Ordinary Shares in the Company to selected qualified investors in South Africa and an offer of new Ordinary Shares in the Company to be made on behalf of the Company by PrimaryBid Limited on its online platform (which will provide retail investors in the UK with an opportunity to participate in the Capital Raise).
Together, the total number of new Ordinary Shares to be issued pursuant to the Capital Raise will not exceed 105,281,686 new Ordinary Shares, representing up to 10 per cent of the Company’s issued share capital as at the date of its most recent notice of annual general meeting. The number of Offer Shares, and the price at which the Offer Shares are to be issued will be announced by the Company at the close of a bookbuild process.
Commenting on the transaction, Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said: “We are very happy to announce the acquisition of a high-quality and well diversified portfolio of assets, in a highly attractive and growing market. The acquisition of BizSpace brings with it an experienced and enthusiastic management team that we believe will be a good fit with the culture of Sirius’ current management team and I look forward to building on the existing relationships between our businesses.
The transaction provides an opportunity to enter a new geography at scale and extends our successful strategy to target highly strategic locations and assets in order to generate sustainable and growing returns on behalf of investors.”
Since its foundation in 2000, BizSpace has grown its network to 72 well-located sites, with a GAV of £377m as at 31 August 2021, and is now an established, scalable and well-diversified UK regional operator of flexible workspace with significant opportunities for BizSpace to grow both organically and inorganically, due to high levels of market fragmentation and few large scale regional operators. The business has demonstrated its resilience as a flexible business model by its trading performance during the Covid-19 pandemic and its maintenance of high levels of both customer retention and cash collection across the same period.
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