Adler Real Estate AG agreed to acquire all shares in Israel-headquartered ADO Group Ltd. for roughly €708 million, which will give it a 33% stake in Luxembourg-based ADO Properties SA.
The transaction, which has a total value of about €970 million, will be funded using a combination of a rights issue, cash from sales of nonyielding assets and financial debt.
The combined real estate portfolio of Adler and ADO Properties is expected to create a pure-play German residential real estate company with a fully consolidated gross asset value of €9.4 billion.
ADO Properties is also in talks to separately sell about 5,800 residential units along with related commercial units and parking spaces.
The acquisition price reflects a 15% discount to ADO Properties' first-half reported European Public Real Estate Association NAV, excluding any expected premium to be realized in connection with the possible sale of the 5,800-unit portfolio.
JPMorgan is the exclusive financial adviser and sole provider of acquisition financing for Adler for the deal. Freshfields is serving as German M&A counsel.
Freshfields Bruckhaus Deringer is Adler's adviser on German M&A, corporate law and the debt financing, while Meitar Liquornik Geva Leshem Tal is advising on Israeli M&A. Arendt&Medernach and Norton Rose Fulbright serve as advisers on corporate and securities laws and on the equity financing, respectively.
