China's CIC backs buyout of French property services player
China Investment Corporation (CIC) has joined a consortium to acquire French property services company Foncia for EUR1.8 billion ($2 billion).
The purchasing group, which is led by Partners Group and also includes Caisse de Depot et Placement du Quebec (CDPQ), is expected to complete the transaction no later than September. Partners Group will hold a majority stake in the company as well as leadership of the board. CIC is participating via its international direct investments unit CIC Capital.
According to a statement, exiting private equity firms Bridgepoint and Eurazeo will achieve a multiple of 2.4x on the investment, representing a shared net disposal gain of EUR1.1 billion. The two firms initially invested in the company in 2011.
Foncia management is expected to remain and work with the consortium on a consolidation strategy for the fragmented French property management market. Further growth initiatives will include product developments and the acceleration of an international expansion.
"With the top spot in the French property services market and the opportunity to expand across the region, Foncia is the sort of growth-focused acquisition opportunity that CIC Capital looks for," Qing Zhang, executive vice president for CIC Capital said in a separate disclosure. "Joint investment with private markets investment managers and other institutional investors is an important strategy that CIC Capital pursues."
Foncia provides a range of residential property management services to owners and tenants, as well as ancillary services such as insurance brokerage, energy brokerage and asset management. It operates across more than 500 branches managing a portfolio of more than 1.8 million European properties. Since 2011, average annual revenue has increased by 4.4% per annum, reaching about EUR700 million in 2015.
CIC Capital was established last year with a mandate to manage bilateral and multilateral fund investments in order to pursue long-term returns and promote international investment cooperation.
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