Swedish buyout giant EQT to buy Baring PE Asia for $7.5 bn

 Swedish buyout giant EQT to buy Baring PE Asia for $7.5 bn

Swedish alternative investment firm EQT has agreed to acquire Baring Private Equity Asia for €6.8 billion ($7.5 billion), marking the largest buyout transaction by a PE firm for an industry peer.

EQT will pay €1.5 billion in cash and €5.3 billion by issuing 191.2 million shares to acquire the Hong Kong-headquartered PE firm that has a large active portfolio in India.

The transaction will immediately pitchfork EQT into one of the biggest alternative investment firms in Asia, where it will compete with the likes of US-based buyout giants Blackstone, KKR, TPG and Carlyle. The EQT deal comes about a year after TPG took a majority stake in secondaries PE firm NewQuest Capital to expand in Asia.

Christian Sinding, CEO and Managing Partner of EQT, said that expanding the firm’s footprint in Asia is one of “strategic objectives” and that the acquisition positions it to capitalize on the structural growth opportunity in Asian private markets.

Baring PE Asia will be rebranded as BPEA EQT Asia after the transaction. It will be headed by Jean Eric Salata, CEO and founder of Baring PE Asia, who will oversee EQT’s Private Capital business in Asia, reporting directly to Sinding. Salata will also join EQT’s Executive Committee.

“Combining our strong position in Asia with EQT’s world-class capabilities in sectors, such as Healthcare and Technology, their proprietary digital transformation and data analytics resources, and their leadership in sustainability, will create a highly differentiated and extremely competitive private markets firm in Asia and globally,” Salata said.

EQT said it will acquire 100% of the BPEA management company, the BPEA general partner entities which control the BPEA funds, and the right to carried interest in selected existing funds (including 25% in BPEA Fund VI and 35% in BPEA Fund VII).

EQT will invest in and be entitled to 35% of the carried interest in all future funds, starting with BPEA Fund VIII. The transaction is likely to close in the fourth quarter of 2022.

BPEA is a top-three private markets investment manager in Asia with €17.7bn assets under management. EQT will have more than €20 billion of invested AUM in Asia across private capital and real assets.

Baring Asia has been operating since 1997. While it mostly strikes PE transactions, it also dabbled in the real estate and growth equity asset classes. It is currently investing from its flagship Private Equity Fund VIII, which had its first close in September 2021.

Baring Asia is one of the most active PE investors in India. Last year, for instance, it finalized a $1.2 billion deal to buy Hinduja Global’s healthcare BPO arm and sealed an even bigger PE secondaries exit deal for the sale of IT company Hexaware to US buyout giant Carlyle.

Sumit Upadhyaya

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