15 Feb 2022

Simpson Thacher advises Blackstone on $24bn recapitalisation of European warehouse business

The deal, which taps into demand for same-day delivery, is being dubbed the largest private real estate transaction ever

Simpson Thacher & Bartlett is advising Blackstone on the $24bn recapitalisation of Mileway, the biggest operator of urban warehouses in Europe, in what is being called the largest private real estate transaction ever. 

The mammoth deal underlines the private equity firm’s confidence in its last-line delivery as demand from consumers for same-day delivery continues to increase, driven by the Covid-19 pandemic. 

As part of the recapitalisation, existing Mileway investors have been offered the chance to retain or increase their shareholding, or exit for cash, according to a company statement. Blackstone said a large part of the capital for the recapitalisation has come from existing investors, which it believes underlines their ‘strong conviction’ in both Milway and the last mile delivery sector.

In order to ensure the deal terms represent the best available outcome for Mileway’s current investors, the company said it would be commencing a ‘go-shop’ process led by Morgan Stanley, which will run for up to 75 days. 

The deal team includes New York partners Wheatly MacNamara, Peter Vassilev, Rony Rothken and Nancy Mehlman as well as London partners Tom Lloyd, Edward Hampson and Étienne Renaudeau. 

Senior counsel Sarah Lane is also working on the deal in London alongside associates Ryan Harvey, Kimberley Chikitch, Luke Murphey, Chun Baak, Beatriz Gil, Sneha Padden, Seema Walji and Joe Donaghey. Also working on the deal in New York is counsel Jodi Schneider, while associates Carter Kagedan, Joshua Gottesman and Sean Stratmoen are advising in Washington DC. 

Simpson Thacher has a long history with Blackstone in the US and has recently started winning the private equity firm’s work in Europe. Last year, the firm hired Blackstone’s European general counsel, Geoffrey Bailhache, as a partner to beef up its private equity offering in Europe. 

However, while the firm has made a number of lateral partner hires in London recently, including four in 2020, the London partner trio working on this deal are all the product of internal promotions: finance specialist Lloyd was made up in 2017, while Hampson, another finance lawyer, with a focus on real estate investments, and antitrust specialist Renaudeau, were both promoted in the firm's 2021 partner round.

Last September, the firm opened for business in Brussels with a team of six lawyers advising clients on European merger control, competition law and regulatory matters post Brexit.

Launched by Blackstone in 2019, Amsterdam-based Mileway currently operates more than 1,500 logistics assets covering 14.7m square meters across 10 countries. The assets were purchased by the private equity giant to build out its last-mile delivery business. 

“Logistics is one of our highest conviction themes globally and the sector continues to prove its resiliency and strong growth potential,” said James Seppala, head of Blackstone’s European real estate division. 

Emmanuel Van der Stichele, Mileway CEO, added: “Blackstone’s ongoing support will enable us to continue executing on our shared vision for Mileway, Europe’s premier last mile logistics company, as we implement our value enhancing initiatives and development plans in key urban locations across the UK and Europe.”

Last month, Simpson Thacher was revealed to be among the firms working on Microsoft's landmark $68.7bn acquisition of Activision Blizzard. The firm is advising Microsoft alongside Weil Gotshal & Manges while Skadden is advising Activision Blizzard. 

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