Ann: ASSET: AUG: Augusta to Acquire KCL Property

• Release Date: 21/03/14 11:52
• Summary: ASSET: AUG: Augusta to Acquire KCL Property & IPT
• Price Sensitive: No
• Download Document  3.62KB

					AUG
21/03/2014 09:52
ASSET

REL: 0952 HRS Augusta Capital Limited

ASSET: AUG: Augusta to Acquire KCL Property & IPT

AUGUSTA TO ACQUIRE KCL PROPERTY LTD & INVESTMENT PROPERTY TITLES LTD

Augusta Capital Limited (Augusta Capital) today announced that it has agreed
to buy KCL Property Limited (KCL) and Investment Property Titles Limited
(IPT), establishing Augusta Capital as New Zealand's pre-eminent property
funds manager with approximately 170 properties and total funds under
management of approximately $1.2 billion (currently $350m).  The transaction
is scheduled to settle on 1 April 2014.

As a result of the transaction, KCL shareholders Bryce Barnett and Phil
Hinton will join the Augusta Capital executive team. Mr Barnett will be
appointed to the Augusta Capital board in conjunction with the appointment of
a fifth director to ensure the board composition remains majority
independent. As previously signalled Augusta Capital also announces the
resignation today of Christopher Francis as an executive and director of
Augusta Funds Management Limited.

The acquisition price of $15 million for the KCL business comprises $10
million in cash and $5 million in AUG scrip. Scrip will be issued at $0.80
cents and will equate to approximately 7.14% of the issued capital of Augusta
Capital (assuming the earn outs under the deal are met). There are retentions
of approximately $800,000 of cash and $3 million of AUG shares which are
linked to earn-out targets required of the shareholder vendors of KCL
Property. The IPT business is being acquired from Bayley Corporation Limited
for $444,000.

The deal is expected to be significantly EPS enhancing for Augusta Capital.

The move brings additional sources of revenue to Augusta alongside
Trans-Tasman expansion opportunities as a result of KCL Property's Australian
business.

Reflecting the size, complexity and geographic spread of the combined
portfolio, Augusta Capital has entered into a strategic alliance with New
Zealand's largest real estate group - Bayleys. This alliance will see Bayleys
provide property and facilities management of the property portfolio as well
as a number of other mutually beneficial arrangements.

Due to the significance of this Bayleys alliance, Cheryl Macaulay, the third
KCL shareholder, will join Bayleys Real Estate where she will be working to
further develop the opportunities represented by this arrangement.  The
arrangements with Bayleys will see Augusta Capital become exclusive partner
for Bayleys for all future funds management initiatives that will cover any
new managed property offers to the market.

Augusta Capital, in conjunction with Bayleys will look to offer a range of
new property funds (both listed and unlisted) to the market on a 50:50 joint
venture and co-branded basis leveraging Bayleys nationwide network of 70
branches and 1,300 personnel.

Bayleys will become the exclusive partner to Augusta Capital for the
sell-down equity raising for all future syndicated property offers.

Post the transaction and the sell-down of the Bunnings Silverdale property
held for syndication Augusta Capital's gearing will sit at approximately 37%.
There is no intention to raise any further capital at this time.

Augusta Capital confirms that it intends to increase its cash dividend to an
annualised 5.0 cents per share (currently 4.0 cents per share) from the June
quarter dividend payment which will be paid in August 2014.

Peter Wilson
Chairman

-ENDS-

For further information please contact:

Mark Francis
Managing Director
Augusta Capital Limited
T (09) 300 6161
F (09) 300 6162
M 021 677 242
E [email protected]
End CA:00248517 For:AUG    Type:ASSET      Time:2014-03-21 09:52:55