Brookfield Business Partners L.P. (NYSE: BBU; TSX: BBU.UN) and
Brookfield Business Corporation (NYSE, TSX: BBUC) (collectively
“Brookfield Business Partners”) together with institutional
partners (collectively “Brookfield”) today announced an agreement
to acquire La Trobe Financial (“La Trobe”), a leading Australian
non-bank lender and asset manager, for approximately $1.1 billion
including a contingent payment tied to the business achieving
certain performance milestones.
Founded in 1952, La Trobe Financial is a
prominent Australian diversified credit asset manager with more
than A$13 billion in assets under management. La Trobe manages
fixed income credit funds on behalf of more than 50,000 qualified
retail investors, primarily in residential property-backed loans.
It also plays a critical role in the Australian real estate credit
market by financing loans to high-quality borrowers.
“We are pleased to expand our presence in
Australia with the acquisition of La Trobe Financial, one of
Australia’s leading mortgage originators and asset managers,” said
Len Chersky, Managing Partner, Brookfield Business Partners. “We
intend to invest in La Trobe Financial to support its growth and
look forward to building on the business’ foundation of continuous
growth and profitability.”
Investment Highlights
- Established track
record. La Trobe has over A$13 billion in assets under
management and a 70-year track record of growth and profitability
which has proven to be highly resilient to economic and housing
cycles.
- Strong competitive
advantage. The company’s integrated residential mortgage
lending and high net worth retail distribution channel results in
stable long-term earnings and consistently high returns on
capital.
- Favorable market
opportunity. La Trobe plays an important role in providing
credit to a growing proportion of high-quality borrowers, such as
business owners, recent immigrants and others who require
specialized underwriting expertise. The business’ integrated asset
management model provides a structural capital advantage in being
able to service these customers.
- Value creation
potential. La Trobe’s large distribution footprint and
recurring investor inflows provide opportunities to further scale
and diversify its product platform.
Funding
Brookfield’s initial investment will be funded
with approximately $765 million of equity, of which Brookfield
Business Partners intends to invest approximately $250 million, and
the balance from institutional partners. Prior to or following
closing, a portion of Brookfield Business Partners' commitment may
be syndicated to other institutional investors.
Transaction Process
The transaction is subject to customary closing
conditions and regulatory approvals, including approval by
Australia’s Foreign Investment Review Board. Closing is expected in
the second quarter of 2022.
Brookfield Business Partners is
a global business services and industrials company focused on
owning and operating high-quality businesses that provide essential
products and services and benefit from a strong competitive
position. Investors have flexibility to invest in our company
either through Brookfield Business Partners L.P. (NYSE: BBU; TSX:
BBU.UN), a limited partnership, or Brookfield Business Corporation
(NYSE, TSX: BBUC), a corporation. For more information, please
visit https://bbu.brookfield.com.
Brookfield Business Partners is the flagship
listed vehicle of Brookfield Asset Management’s Private Equity
Group. Brookfield Asset Management is a leading global alternative
asset manager with approximately $690 billion of assets under
management. More information is available at
www.brookfield.com.
For more information, please contact:
Investor
RelationsAlan FlemingTel: +1 (416) 645 2736Email:
alan.fleming@brookfield.com |
MediaSebastien
BouchardTel: +1 (416) 943-7937Email:
sebastien.bouchard@brookfield.com |
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND
INFORMATION
Note: This news release contains
“forward-looking information” within the meaning of Canadian
provincial securities laws and “forward-looking statements” within
the meaning of applicable Canadian and U.S. securities laws.
Forward-looking statements include statements that are predictive
in nature, depend upon or refer to future events or conditions,
include statements regarding the operations, business, financial
condition, expected financial results, performance, prospects,
opportunities, priorities, targets, goals, ongoing objectives,
strategies and outlook of Brookfield Business Partners, as well as
the outlook for North American and international economies for the
current fiscal year and subsequent periods, and include words such
as “expects,” “anticipates,” “plans,” “believes,” “estimates,”
“seeks,” “intends,” “targets,” “projects,” “forecasts” or negative
versions thereof and other similar expressions, or future or
conditional verbs such as “may,” “will,” “should,” “would” and
“could.”
Although we believe that our anticipated future
results, performance or achievements expressed or implied by the
forward-looking statements and information are based upon
reasonable assumptions and expectations, the reader should not
place undue reliance on forward-looking statements and information
because they involve known and unknown risks, uncertainties and
other factors, many of which are beyond our control, which may
cause the actual results, performance or achievements of Brookfield
Business Partners to differ materially from anticipated future
results, performance or achievement expressed or implied by such
forward-looking statements and information.
Factors that could cause actual results to
differ materially from those contemplated or implied by
forward-looking statements include, but are not limited to: the
impact or unanticipated impact of general economic, political and
market factors in the countries in which we do business; including
as a result of the ongoing novel coronavirus (SARS-CoV-2) pandemic,
including any SARS-CoV-2 variants (collectively, “COVID-19”); the
behavior of financial markets, including fluctuations in interest
and foreign exchange rates; global equity and capital markets and
the availability of equity and debt financing and refinancing
within these markets; strategic actions including dispositions; the
ability to complete and effectively integrate acquisitions into
existing operations and the ability to attain expected benefits;
changes in accounting policies and methods used to report financial
condition (including uncertainties associated with critical
accounting assumptions and estimates); the ability to appropriately
manage human capital; the effect of applying future accounting
changes; business competition; operational and reputational risks;
technological change; changes in government regulation and
legislation within the countries in which we operate; governmental
investigations; litigation; changes in tax laws; ability to collect
amounts owed; catastrophic events, such as earthquakes; hurricanes
and pandemics/epidemics; the possible impact of international
conflicts and other developments including terrorist acts and cyber
terrorism; and other risks and factors detailed from time to time
in our documents filed with the securities regulators in Canada and
the United States.
In addition, our future results may be impacted
by various government mandated economic restrictions resulting from
the ongoing COVID-19 pandemic and the related global reduction in
commerce and travel and substantial volatility in stock markets
worldwide, which may negatively impact our revenues, affect our
ability to identify and complete future transactions, impact our
liquidity position and result in a decrease of cash flows and
impairment losses and/or revaluations on our investments and
assets, and therefore we may be unable to achieve our expected
returns. See “Risks Associated with the COVID-19 Pandemic” in the
“Risks Factors” section included in our Management’s Discussion and
Analysis of Financial Condition and Results of Operations in our
Form 20-F for the year ended December 31, 2020.
We caution that the foregoing list of important
factors that may affect future results is not exhaustive. When
relying on our forward-looking statements, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events. Except as required by law,
Brookfield Business Partners undertakes no obligation to publicly
update or revise any forward-looking statements or information,
whether written or oral, that may be as a result of new
information, future events or otherwise.
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