Elanor Investors Group (ASX: ENN) has confirmed the successful integration of Challenger Ltd’s $3.4 billion commercial real estate business into its own operations.
The company completed its acquisition of Challenger in early July and has successfully into its funds management platform – with the full realisation of synergies underpinning forecast incremental funds management EBITDA of over $12 million in FY24. The transaction is forecast to increase the Group’s AUM from $3 billion to over $6 billion.
Elanor’s CEO and Managing Director, Glenn Willis, said the transaction delivers on several key strategic objectives of the business, delivering material earnings accretion and return on equity, and step-change growth in AUM with new strategic capital partnerships.
The acquisition delivers significant value to Elanor Securityholders:
- A 78% increase in forecast base management fee income for FY24 with incremental annualised base management fees of $16.1 million
- Forecast incremental EBITDA of over $12 million in FY24 (representing a transaction EBITDA multiple of ~ 3x)
- New institutional capital partners and Elanor Securityholders (Challenger 13.7% and Abu Dhabi Investment Council (“ADIC”) 3.0%)
- Grant of options to ADIC to acquire a further 7.5 million ENN securities at exercise prices of between $2.25 to $2.75 (options are linked to ADIC committing a further $0.5 billion in AUM)
- Exclusive capital raising agreement with Fidante to distribute Elanor’s real estate managed funds
The combination of Elanor’s real estate funds management capability with Challenger’s market leading capital raising platform positions the Group for further strong growth,” Mr Willis said.
“This acquisition is a milestone achievement for Elanor as we execute on our key strategic objective to become the leading Australian real estate funds management group known for delivering exceptional investment returns for our capital partners.”
