Keppel Corporation - CGS-CIMB Research 2023-11-29: Making Headway Into Europe

• Keppel announced the proposed acquisition of Aermont Capital (Aermont), a European real estate asset manager. Aermont has S$24bn of total funds under management (FUM) as at end-Jun 2023, and focuses on real estate investments in Western Europe.

Two phases of transaction to complete by 1H24 and 2028

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• phase 2 would commence and it would acquire the remaining 50% in 2028F for ~S$834m.

In both phases, the consideration will be funded via a mix of cash and treasury shares. Keppel expects the transaction to be immediately accretive upon the close of phase 1.

Accelerating FUM growth and growing its foothold in Europe

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• Keppel also sees value in growing its real estate footprint in Europe, where the group currently only has renewable and data centre assets.
• Management sees minimal overlap in capabilities between Keppel and Aermont, and highlighted the possibility of expanding Aermont’s investment outreach to Asia over the longer-term.

Valuation seems fair, with longer-term benefits for Keppel

• Read more at SGinvestors.io.

LIM Siew Khee CGS-CIMB Research | Kenneth TAN CGS-CIMB Research | https://www.cgs-cimb.com 2023-11-29 SGinvestors.io

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