TPG-owned Inghams sells $138m in real estate assets

Inghams put a portfolio of over 50 industrial and agricultural properties on the market earlier this year. They were expected to fetch up to A$650 million, which would more than cover the equity tranche from TPG's purchase of the business in 2013. The PE firm paid A$880 million, with a minimum equity commitment of 30%. It obtained A$625 million in bank financing.

W.P. Carey specializes in corporate sale-leaseback, build-to-suit financing and the acquisition of single-tenant net-lease properties. It has participated in 85 transactions worth $2.4 billion that have provided financing for private equity-sponsored companies.

The properties acquired from Inghams will be leased back to the company on a 20-year contract. W.P. Carey said the assets represent the vast majority of Inghams' long-term supply chain infrastructure for raw materials, and are strategically located within the company's state-of-the-art logistics system.

"The transaction with Inghams represents W. P. Carey's first investment in Australia and reflects our established position as a source of financing for creditworthy private equity-sponsored and privately-held companies, as well as our strategy of owning and expanding a well-diversified real estate portfolio," said Grace Shui, managing director of W.P. Carey Asia, in a statement.

Six properties from the Inghams portfolio have already been sold to CorVal, a domestic funds management group, for A$100 million, according to The Australian.

Inghams is Australia's largest poultry producer, with an approximately 35% market share. It is major supplier to the country's largest supermarket chain as well as the likes of McDonald's and KFC. The company generated revenues of approximately A$2.3 billion for the year ended March 2014.

This is not the first time TPG has used property sales to enhance deal returns in Australia.

In 2006, the private equity firm's then Asian affiliate - Newbridge Capital - and Blum Capital bought department store chain Myer for about $1 billion, half in equity, and exited via a $2 billion IPO three years later. The investment generated a 6x return - 4.5x from operational involvement, 0.5x from debt payouts and 1x from a property deal.

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