KKR & Co. Inc. (NYSE: KKR) has confirmed that it has inked an acquisition agreement with Mitsubishi Corporation (Mitsubishi) and UBS Group and UBS AG (UBS). As per the acquisition agreement, KKR will buy all of the outstanding shares of Mitsubishi Corp.-UBS Realty Inc. (MC-UBSR) from Mitsubishi and UBS Asset Management (UBS-AM) in an all-cash transaction worth JPY230 billion (US$2 billion).
MC-UBSR has earned a reputation as one of Japan's most prominent real estate asset managers. MC-UBSR is a forerunner in the Japanese real estate investment trust (J-REIT) category. It was founded in 2000 as a joint venture between Mitsubishi and UBS-AM. It is now one of Japan's major real estate asset managers, with assets under management totaling JPY1.7 trillion (US$15 billion).
Furthermore, the asset manager's acquisition strengthens KKR's commitment to Japan, where the firm has had a presence and staff since 2006. KKR is dedicated to MC-existing UBSR's strategy and continuity, and it plans to use its worldwide network and resources to generate value for JMF and IIF unitholders.
In addition, the strategic deal brings together the real estate investment and asset management expertise of both KKR and MC-UBSR. It is projected that the deal will strengthen the acquired operation's position as a leading J-REIT with increased organic and inorganic development potential.
As per the deal, 76KK, a KKR subsidiary, will buy all of MC-outstanding UBSR's shares in an all-cash deal worth JPY230 billion (US$2 billion). 76KK will also purchase at market price the units in JMF and IIF now owned by Mitsubishi, therefore increasing the alignment of interests between KKR and JMF and IIF unitholders. The transaction is likely to be immediately profitable to KKR on a Fee-Related Earnings per share basis.