Sirius to expand into the UK following BizSpace acquisition
SIRIUS Real Estate, owner of business and industrial parks in Germany, has acquired Helix Investments, holding company of BizSpace, for £245 million (R4.96 billion) cash as it enters the UK market for the first time.
Sirius also yesterday announced a £135m capital raise, which will include an offer of shares to UK, South African and other institutional investors, and an offer to UK retail investors.
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.
Sirius’ board said in a statement the acquisition was an “attractive and important opportunity” to allow Sirius to enter, at scale, an under-served wider UK market, with a one-step acquisition of an established platform.
It would also allow Sirius to replicate the success of its model in another European geography, providing Sirius’ shareholders with an opportunity for significant value creation and further long-term growth potential. The acquisition would be funded with new and existing debt together with the proceeds of a proposed fund-raise.
The £135m fund-raise would comprise a placing of new shares to institutional investors including in the UK, to selected investors in South Africa and an offer of new shares to UK retail investors, to be made on behalf of the company by PrimaryBid Limited, on its online platform. Together, the total number of new shares would not exceed 105.28 million shares, or 10 percent of the company’s capital.
BizSpace’s existing management team; including John Spencer, current chief executive; Tariq Khader, financial director; and Mo Jiwaji, BizSpace commercial director, would remain with the business to drive the operations, bringing their experience of the UK market for the benefit of the combined group.
Sirius, which also yesterday reported interim results, said pre-tax profit increased by 25.7 percent to €78.2m (R1.36bn) for the six months to September 2021. Funds from operations grew by 13.4 percent to €33m. The interim dividend per share increased by 12.1 percent to 2.04 euro cents.
The outlook for the second half was positive, with a high percentage of the German population fully vaccinated and the German economy forecast to grow by 4 percent in 2022.
“German manufacturers continue to take action to on-shore production and shorten supply chains. Sirius has delivered strong organic and acquisitive growth in H1 and looks forward to using its internal operating platform to realise further opportunities for growth in Germany,” the group said.
Trading was currently in line with expectations for the full financial year, directors said.