Kirkland, Weil, CMS steer TPG’s €3.9bn acquisition of Aareal Bank tech unit

Kirkland reps TPG and Canadian investment group CDPQ on purchase of property lender’s prized unit Aareon

Kirkland & Ellis, Weil Gotshal & Manges and CMS are steering the sale of Aareal Bank’s property software unit Aareon to private equity giant TPG and Canadian investment group CDPQ. 

Kirkland is counselling longtime client TPG and CDPQ on the deal, which is based on an enterprise value for Aareon of €3.9bn. 

Meantime CMS is acting for Aareal and Weil is acting for Advent International, which bought a 30% stake in Aareon in 2020 and took Aareal private last year as part of an investor consortium. 

The deal values Aareal’s stake in Aareon at about €2.1bn. The Wiesbaden-based bank said in a statement that it will book “transaction-related costs” of about €150m, most of that in the second quarter. 

The Kirkland team advising TPG and CDPQ was led by corporate partners Adrian Maguire, Vincent Bergin, Philip Goj, Sebastian Häfele, Andrew McAlpine and Jessica Corr, who are based across the firm’s London and Munich offices. 

CMS’s team was headed by Frankfurt-based corporate partner Oliver Wolfgramm alongside corporate partner Eckart Gottschalk and counsel Matthias Löhle, Philipp Koch and Dominik von Zehmen. Wolfgramm also led a CMS team that advised Aareal when it bought payments platform CollectAI from Otto Group in 2022. 

The Weil team acting for Advent was led by private equity M&A partner Jonathan Wood, co-managing partner of the firm’s London office, alongside corporate partners Ansgar Wimber and Barbara Jagersberger. Advice on aspects of the transaction was also given by private equity partner Lewis Blakey and finance partner Alex Eagle.

Wood has acted for Advent and its portfolio companies on numerous deals, including the $1.9bn sale of defence technology company CAES Systems to American manufacturing giant Honeywell, announced late last week. 

The Aareon deal comes as Aareal grapples with a global downturn in commerical real estate. The bank has a quarter of its business in the US, according to Reuters, which has been particularly affected by the crunch. 

In spite of the challenges Aareal said that its banking business excluding Aareon was “well on track” to achieving its operating target of €250m to €300m this year. 

Earlier this year Aareal’s owners, led by Advent and Centerbridge Partners, lined up advisers to sell Aareon, with other buyout groups including KKR, Blackstone and CVC Capital Partners reportedly also eyeing the unit.  

For its part Aareon makes software for the property industry including for payments, contracts and facilities management.

The sale will give CDPQ a minority interest in the company, with Aareon also set to maintain a stake. 

Arma Partners acted as lead financial advisor and Goldman Sachs acted as financial advisor to Advent and Aareal on the deal, while Morgan Stanley acted as financial advisor to TPG and CDPQ. 

Closing is expected to take place in the second half of 2024, subject to customary closing conditions and approvals.

Kirkland placed eighth in LSEG’s global M&A legal advisor rankings by deal value in the opening three months of the year, working on deals worth just north of $80bn as M&A picked up after falling to a 10-year low in 2023. The firm led the rankings for 2023 after advising on deals worth nearly $400bn over the course of the year.

Meantime Weil’s work on deals worth $29.7bn in the first quarter saw it place 19th; the firm ranked 20th for 2023 after working on deals worth just under $120bn. CMS was not among the top 25 firms included in the rankings for either period.

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