US industrial real estate owner Prologis to buy KTR Capital Partners for $5.9 bn
20 Apr 2015
Prologis Inc, one of the world's largest industrial real estate owner, yesterday struck a deal to buy the industrial real estate assets and operating platform of KTR Capital Partners (KTR) for $5.9 billion in order to expand in the US.
The acquisition, which will be carried out through Prologis US Logistics Venture, a 55-45 per cent joint venture with Norges Bank Investment Management (NBIM), includes the assumption of about $700 million in debt and the issuance of as much as $230 million of common limited partnership units in Prologis to KTR.
NBIM is Norway's sovereign-wealth fund.
Prologis, which has a market value of about $22 billion, has obtained a $1-billion bridge facility from Morgan Stanley to fund the transaction.
Prologis said that New York-based KTR's 60-million square foot operating portfolio comprises 322 properties and aligns with its own investment strategy with approximately 95 per cent overlap with its existing US portfolio.
The acquisition also includes 3.6 million square feet of development-in-progress and a well-located land bank with a build-out potential of 6.8 million square feet.
The deal enhances the company's position in Southern California, New Jersey, Chicago, South Florida, Seattle and Dallas.
Prologis owned or had investments in properties and development projects of a total of around 594 million square feet (55 million square meters) in 21 countries.
The San Francisco-based company leases modern distribution facilities to more than 4,700 customers, including third-party logistics providers, transportation companies, retailers and manufacturers.
''We remain committed to maintaining our strong balance sheet, which will continue to provide us with the flexibility to capture market opportunities across the business cycle," said Tom Olinger, chief financial officer, Prologis.''
"This highly accretive transaction advances our strategy of using our scale to grow with minimal incremental overhead and demonstrates the unique appeal and the strength of our currency through our OP unit structure," he added.
The transaction is expected to close in the next 30-60 days, subject to closing conditions.
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