LondonMetric worth £4.4 bln after acquiring Urban Logistics

LondonMetric is set to be valued at £4.4 billion, strengthening its position in the top 5 UK-listed REITS, following its acquisition of Urban Logistics which creates one of the largest property investment groups in the country.

The final cash and stock deal valued Urban Logistics, a company focused on last mile infrastructure in the UK, at £698.9 million.

LondonMetric had initially made a lower offer in April but raised it a week later. The revised offer was unanimously accepted by Urban Logistics company directors, who described it as “fair and reasonable”.

“This is an excellent transaction that grows our urban logistics platform and supports our triple net strategy,” said Andrew Jones, Chief Executive, LondonMetric. “Urban warehousing remains our strongest conviction call for organic rental growth across the UK real estate market.”

LondonMetric said that following the deal it will have a £7.3 billion portfolio focused on logistics, convenience, healthcare, entertainment, and leisure, while the combined group is expected to benefit from operational synergies and scale efficiencies. Logistics accounts for 55% of the portfolio, with 40% in urban or last-mile logistics.

“We have a demonstrable track record of successfully executing on M&A, and we expect the transaction will deliver substantial synergies, cost savings and accelerated earnings growth”, said Jones. “Our scale will continue to deliver enhanced access to capital, more debt optionality, increased share liquidity and larger investment opportunities.”

UrbanLogistics shareholders will own about 11% of the combined company, while LondonMetric shareholders will control 89%.

“The acquisition offers Urban Logistics shareholders a premium price for their shares, an attractive combination of cash and share consideration and ongoing exposure to the logistics sector via a company of greater scale and liquidity,” said Nigel Rich, Chair, Urban Logistics, adding that since its launch in 2016 the REIT had assembled an “exceptional portfolio of single-let, last mile assets”.

The transaction is expected to be completed by the end of June.