Becton Executive Director and Head of Funds Management, Matthew Chun, said the acquisition of the Sydney-based property funds management group which has approximately $450 million of funds under management (FUM) represents an excellent bolt on acquisition to Becton’s existing funds management business.
“The Lachlan team has established an excellent business with a track record of increasing profits and delivering strong returns to fund investors. We have spent considerable time researching unlisted property fund managers in Australia and Lachlan is a stand out business and manager. The Lachlan directors and employees share the philosophy of “active asset management” that Becton employs across its funds management business. There is also a strong cultural and strategic fit between Lachlan and Becton in terms of structure, assets, investors and co-nvestment strategy all of which will ensure investors in these unlisted funds have a strong alignment with Becton,” said Mr Chun.
Becton’s acquisition of Lachlan is comprised of two parts; $42.4 million for the funds management business and $21 million for units in Lachlan managed funds. Like Becton, Lachlan has a strategy of co-investing in the funds that it manages. The units will be acquired by Becton’s managed unlisted funds. The remaining portion of the acquisition price will be debt funded and is payable in two instalments, approximately 15% at signing and the remainder on 31 January 2008.
The acquisition of the business (excluding the $21 million of units) represents a price of approximately 11 times earnings before interest and tax (EBIT).
Becton CEO, Hamish Macdonald said, “The acquisition addresses numerous strategic objectives and provides several key benefits to Becton.”
“The acquisition fits well with Becton’s strategy of increasing our recurring earnings. It also provides significant synergies through the removal of duplicate functions (such as investor relations, marketing and finance) and increases our growing presence in Sydney, following the acquisition of the Estate
Property Group, through the addition of some talented employees.”