Accrue Capital, the real estate private equity house founded by Stephen Webster and John Slade, has bought private property company Heathcroft Properties in its debut acquisition
The purchase of Heathcroft, which was established in 1994, comes with a £36m investment portfolio, comprising mainly retail and industrial properties. There is also a small residential investment estate and an income stream from shops within four major hospitals.
Stephen Webster, chairman, Accrue Capital, said: “We agreed an exclusivity period with the board of Heathcroft and then having structured the debt and equity, tabled a formal and binding offer, which was followed by a swift completion.
“The transaction was effected by way of an offer to purchase the entire share capital of the company from all 186 shareholders.
“In view of the shareholding structure of the company, tax considerations and the diverse nature of the property portfolio, this was a complex transaction, undertaken to the standards of a public company acquisition.”
The diversified portfolio produces a net income in excess of £3m. The average length of lease is over 10 years. Tenants include Argos, W H Smith, Boots, Corals, Virgin, Iceland, Eat, the NHS and the Post Office.
Heathcroft’s offices in Marlow will be retained and the existing management team brought under the Accrue umbrella.
Debt of £22.5m was arranged with the Corporate Real Estate Team at Lloyds TSB Corporate Markets. Equity was provided from within Accrue’s own resources including its Exempt Unit Trust and additional funding obtained from Revcap.
Justin Snoxell, lead relationship director, Lloyds TSB Corporate Markets’ Corporate Real Estate team, London, said: “Accrue’s plans and vision are extremely impressive, and testament to the top quality management you’d expect from such experienced operators as Stephen Webster and John Slade.
“We worked very closely with them to get a deep understanding of the business in order to develop the right funding package. We’re looking forward to a long relationship with Accrue as the business continues to grow.”
Accrue Capital was advised by CB Richard Ellis, DTZ, Addleshaw Goddard and Thompson Taraz. Heathcroft was advised by Olswang and PKF.
