A listed property business with $350 million of real estate is growing into a business managing $1.2 billion of property through a deal with the country's largest property syndicator and a real estate agency business.
NZX listed Augusta Capital, which was trading at 79c, has agreed to buy syndicator KCL Property and Bayley Corporation's Investment Property Titles which means it will be managing about 170 properties in the deal due to settle on April 1.
Augusta, closely associated with the Francis family Richlister Peter Francis, has until now been one of the smallest property entities trading on the NZX
Augusta's announcement from Peter's son and managing director Mark Francis said KCL shareholders Bryce Barnett and Phil Hinton would join Augusta's executive team. Barnett is also going on Augusta's board.
The acquisition price of $15 million for the KCL business will be paid in $10 million cash and $5 million in Augusta shares, issued at .80 cents and will equate to about 7.14 per cent of the issued capital of Augusta Capital, if the earn-outs under the deal are met.
There are retentions of about $800,000 of cash and $3 million of Augusta shares which are linked to earn-out targets required of the shareholder vendors of KCL Property.
"The IPT business is being acquired from Bayley Corporation for $444,000," Augusta said.
A deal has also been done with Bayleys, in the form of an alliance which Francis said would see Bayleys provide property and facilities management "as a number of other mutually beneficial arrangements".
An institutional investor said Augusta was finally getting some serious scale. Funds management was about scale and operational leverage and this deal would make the market look at Augusta differently.