TAG Immobilien AG signed an agreement to acquire 100 percent of the shares in ROBYG S.A from Bricks Acquisitions Limited, a company controlled by The Goldman Sachs Group and funds advised by affiliates of Centerbridge Partners L.P. This acquisition follows TAG’s successful entry into the growing Polish residential market when acquiring Vantage Development in late 2019. The final purchase price is based on a total transaction consideration of PLN 3,150 million (c. EUR 694 million) and subject to certain cash distributions to the Sellers of up to PLN 700 million (c. EUR 154 million) to be made prior to the closing of the transaction and is expected to be in a range of c. PLN 2,450-2,550 million (c. EUR 540-560 million, based on a PLN/EUR exchange rate of 0.22).
The purchase price, potential repayments of existing financial debt of ROBYG, and further working capital for ROBYG’s investments will be funded by a bridge facility of up to EUR 750 million provided by Bank of America, Credit Suisse, Deutsche Bank, and Société Générale. The acquisition is expected to close in Q1 2022 subject to mandatory anti-trust clearance, whilst TAG management intends to refinance the bridge facility by way of capital market instruments in 2022, market conditions permitting. VICTORIA PARTNERS is acting as Financial Advisor to TAG on the acquisition and related financing transactions.
ROBYG is the largest residential real estate developer in Poland focused on Poland’s major cities, with a track record of more than 26,000 units completed and delivered in the past 20 years. The secured residential pipeline currently consists of residential projects in Warsaw, Wroclaw, TriCity and Poznan representing a total of c. 23,000 unsold units. Thereof, according to TAG’s current assumptions, up to c. 12,000 units will be held upon completion as yielding assets on the balance sheet to add to TAG’s rental portfolio in Poland, whilst the remainder of the development pipeline (c. 11,000 units) is designated for sale.
Poland has become a sought-after market for investors, following strong economic growth with increased purchasing power and ongoing urbanization over the last years. The current housing shortage in major Polish cities has driven up prices of residential units as well as rent levels. Rent levels in major Polish cities, in particular, have grown significantly since 2015, clearly outperforming the respective growth rates in other major European economies. The acquisition of ROBYG will enable TAG to significantly accelerate the pace of growth of its existing Polish business.
ROBYG and Vantage will form TAG’s platform in Poland, combining two successful companies with excellent management teams and highly skilled employees. Claudia Hoyer, COO of TAG, explains: “Vantage’s strong presence in Wroclaw, Poznan and Lodz combined with its experience in the rental business, and ROBYG’s strong position in the Warsaw and TriCity markets, will create a leader in the Polish residential real estate market, operating in both the rental and sales segments. We are very much looking forward to the future cooperation with both teams, which we have come to know as very professional.”
Martin Thiel, CFO of TAG, comments on the strategic and financial rationale: “The acquisition of ROBYG is an outstanding opportunity for TAG to continue realizing external growth and high yields within our defined set of financial metrics, and to further strengthen our footprint in the rapidly growing Polish residential-for-rent market.”
TAG’s management is fully committed to conducting any bridge facility take-out transaction in a capital structure efficient manner as well as maintaining the current investment-grade credit rating. Martin Thiel emphasizes: “The acquisition of ROBYG will not compromise TAG’s long-term strategy of value-creating growth from realizing such opportunities on the back of a clearly disciplined capital structure.”