Legg Mason Acquiring Clarion Partners

Global asset manager Legg Mason Inc. announced that it has agreed to acquire a majority interest in Clarion Partners, the New York-based real estate firm that manages approximately $40 billion across the real estate risk/return spectrum. Under the terms of the deal, Legg Mason will acquire an 83% ownership stake in Clarion Partners for $585 million, and pay for its portion of certain co-investments on a dollar for dollar basis, estimated at $16 million. Clarion Partners was represented by Morgan Stanley, King & Spalding and Davis Polk & Wardwell LLP, and advised by Grail Partners. RBC Capital Markets and Azrack & Co. served as financial advisors to Legg Mason.

"Clarion Partners, with a focus on strong performance through market cycles, a positive growth profile and differentiated product offerings, brings an important alternative asset class to our portfolio of investment managers. Whether they seek growth, capital preservation or income, we are further able to offer our clients investments with attractive solutions. Most importantly, the experienced management team at Clarion Partners shares our passion for innovation, the creation of exceptional value through responsible investing principles and focus on excellence for clients. We welcome them to Legg Mason," said Joe Sullivan, Chairman and CEO of Legg Mason.

Clarion's previous majority partner, private equity firm Lightyear Capital, will sell its entire ownership stake in the transaction. Lightyear will continue to be "very active in the asset management space," said Mark Vassallo, managing partner of Lightyear Capital. Clarion will join Legg Mason as one of its independent investment management affiliates, and the management team (a significant number of which have signed long term contracts in conjunction with the transaction) will retain 17% of the outstanding equity in Clarion Partners. The deal is expected to close in the second quarter of 2016.

For more news and information visit Blumberg Partners.

GLP, GIC Make $8.1B IndCor Purchase

Blackstone announced this week that Blackstone Real Estate Partners VI & VII agreed to sell IndCor Properties to affiliates of GIC, Singapore's sovereign wealth fund, for $8.1 billion. GIC's partner in the acquisition is Global Logistic Properties Ltd., one of the largest owners of warehouses and other industrial property in Asia, according to a Wall Street Journal article. GIC is estimated by the Sovereign Wealth Fund Institute to manage around $320 billion in assets; real estate accounted for 7% of its portfolio in the financial year to April 1, according to its annual report. Closing is expected to occur in the first quarter of 2015. Eastdil Secured, Citigroup, Barclays and RBC Capital Markets acted as advisors to Blackstone in the transaction.

Tim Beaudin, IndCor CEO, said: "We built IndCor through 18 acquisitions to be one of the largest industrial real estate companies in the United States. We are excited about the company's future prospects under new long-term ownership with GIC." As a result of this transaction, IndCor will no longer be pursuing an IPO. The sale is the latest in a string by Blackstone's real estate unit, which has returned more than $16 billion to fund investors since the end of the third quarter of 2013. This year the firm has sold five Boston office buildings totaling 3.3 million square feet, along with shares of hotel operator Extended Stay America Inc., shopping-center owner Brixmor Property Group Inc. and Hilton Worldwide Holdings Inc., according to a Bloomberg report.

For more news and information visit Blumberg Capital Partners.

Ernest Health Sold for $400M

Medical Properties Trust (MPT) announced this week that it had acquired Ernest Health and its portfolio of 16 properties for $400 million according to a Health Investor article. MPT will assume the real estate assets of 12 Ernest facilities and lease the properties back to Ernest under an initial term of 20 years with three five-year extension options. A venture between an MPT affiliate and existing management of Ernest will acquire Ernest Health, Inc. RBC Capital Markets, LLC acted as MPT's exclusive financial advisor for this transaction. According to the article, MPT intends to fund the acquisition with a combination of borrowings under its revolving credit facility, borrowings under a new $80 million term loan facility from JP Morgan Chase Bank, NA and RBC Capital Markets, as well as net proceeds from other debt or equity capital market issuances.

"With transformative, highly accretive transactions like these, we continue to demonstrate our unique ability to create high quality long term sources of cash flow from hospital real estate," said Edward K Aldag, chief executive of MPT. "Completing these transactions will give MPT upside potential to the long term growth of Ernest, and adds another premiere post acute hospital operator to our relationships with others such as Vibra, Kindred, Healthsouth, LifeCare, Cornerstone and Post Acute."

For more news and information visit Blumberg Capital Partners.