Goodman Group to sell management rights of Goodman NZ
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The news: Goodman New Zealand has agreed to internalise the management of Goodman Property Trust (GMT) from Goodman Group to support its future growth strategy.
The numbers: Australia-based Goodman Group will been paid NZD272.4 million ($256.3 million) to relinquish its management rights for shares in NZX-listed Goodman Property Trust (GMT), and for the associated co-operation arrangements and services.
Net of tax, the NZD199.3m consideration represents a 9.1 times multiple of the NZD22 million normalised FY24 savings GMT expects to realise.
An additional $17.6 million will be paid to Goodman Group to settle GMT's performance fee obligations, to acquire its interest in co-owned investment properties, and for the net tangible assets of Goodman Property Services.
Goodman Group will use the total consideration of NZD290 million to subscribe for units in GMT at NZD2.14 each.
The context: Through its subsidiaries, ASX-listed Goodman Group has been the manager of GMT and a cornerstone investor since 2003. The executive team, including Goodman New Zealand CEO James Spence, will retain their current roles.
The corporate structure change is subject to unitholders and other approvals.
What they said: Spence said: "Internalisation is expected to provide growth opportunities for our business, and immediate and longer-term benefits to our unitholders".
"It reduces expenses, diversifies income, and enhances the ability to recycle capital through the establishment of a complementary property funds management business," he said.
Goodman Group CEO Greg Goodman: "This transaction is all about growth and capturing the opportunity available in the New Zealand market.
"Additionally, access to alternative funding sources will allow GMT to finance this growth in a way that will generate significant value for GMT unitholders."
The source: ASX announcement
