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Patria Investments Announces Agreement To Acquire VBI Real Estate; Terms Not Disclosed

GRAND CAYMAN, Cayman Islands, June 09, 2022 (GLOBE NEWSWIRE) -- Patria Investments ("Patria") (NASDAQ:PAX), a global alternative asset manager, announced today an agreement to acquire VBI Real Estate

Benzinga · 06/09/2022 08:26

GRAND CAYMAN, Cayman Islands, June 09, 2022 (GLOBE NEWSWIRE) -- Patria Investments ("Patria") (NASDAQ:PAX), a global alternative asset manager, announced today an agreement to acquire VBI Real Estate ("VBI"), one of the top independent alternative real estate asset managers in Brazil, with approximately R$ 5 billion in assets under management across both development and core real estate vehicles. The transaction is structured in two stages, the first of which entails the acquisition of 50% of VBI by Patria. The second stage, when closed, will lead to full ownership and integration of VBI to Patria's platform.

"We are very excited to join forces with VBI as the key anchor for our real estate strategy in Brazil looking forward," said Alex Saigh, Patria's CEO. "Over the last 15 years, VBI's team built a stellar track record and established the firm as a top player in the Brazilian market. This transaction aligns Patria with highly specialized investment talent and represents an important step in building valuable permanent capital AUM."

The Brazilian market includes more than R$ 220 billion in listed real estate funds, and has grown at an annualized rate of 28% over the last 5 years. The asset class is an attractive entry point into alternatives for local high net worth and retail investors, as it offers both liquidity through public markets and significant tax benefits to individual investors.     

VBI was established in 2006, and currently manages approximately R$ 5 billion (or more than US$ 1 billion) in assets under management, including R$ 3.7 billion in permanent capital REIT structures and the remainder in drawdown-style development funds. Annualized AUM growth of 38% from 2018 through 2021 has positioned VBI as a top independent REIT manager in Brazil with strong presence and performance in the country's three most relevant sub-sectors – logistics, office and credit. VBI is led by five senior partners that bring an average of 20 years of industry experience and an outstanding reputation among the region's key clients.

"VBI and Patria are a strong fit," said Ken Wainer, co-founding partner of VBI. "We're delighted to become part of the leading alternative investment platform in Latin America.  Together we can expand our offering of best-in-class real estate investment solutions for local and global institutional investors."

"We are thrilled to join with Patria in pursuit of our mutual goals in the Brazilian market", said Rodrigo Abbud, co-founding partner of VBI. "The financial deepening in Latin America presents a great opportunity for the best asset managers to attract new capital, and this partnership aligns our specialized real estate expertise with Patria's long standing reputation in the alternatives space."

Transaction Details

While specific financial terms are not being disclosed, the transaction will be structured in two stages. The first stage is expected to close within 60 days, and entails the acquisition of 50% of VBI for cash consideration, plus the addition of Patria's two existing Brazilian REIT vehicles. During stage one, Patria's real estate team will join forces with VBI, and VBI will effectively manage Patria's real estate platform in Brazil. Cash payments for stage one are scheduled in two installments to be paid in 2022 and 2023, plus one additional payment conditioned on VBI's Fee Earning AUM growth to be paid between 2024 and 2027. When closed, the second stage will lead to full ownership and integration of VBI's platform by Patria, and that is expected to commence within 24-36 months. Stage two payment will be divided in two annual installments to be paid in a combination of cash and PAX Class A shares, with the equity portion being capped at 50% of the total value of the stage two payment.