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QuotedData’s morning briefing 22 December 2021

In QuotedData’s morning briefing 22 December 2021:

  • Syncona (SYNC) has reached an agreement to sell its portfolio company Gyroscope Therapeutics Holdings to Novartis, a leading global medicines company, for up to $1.5bn on a cash and debt free basis, with an upfront payment of $800m and up to $700m (£528 million) potentially due upon the achievement of certain customary milestones related to clinical development, regulatory approvals and reimbursement. Syncona co-founded Gyroscope in 2016 and has taken a long-term approach to building the business, working closely with its management team. On closing, the transaction will provide cash proceeds of £334m for Syncona’s holding in Gyroscope, representing a £180m uplift (27p per share) to the previous valuation, a 3.0 multiple on Syncona’s original cost of £113m and an internal rate of return  of 55%. In addition, the sale of Gyroscope will potentially generate a further £255m of proceeds for Syncona, through future milestone payments, which if received would take total proceeds to £589m, a 5.2 multiple on original cost. Syncona is also positioned to benefit from any future commercialisation of Gyroscope’s lead programme via a low single digit royalty on future sales revenue.

  • The investment adviser for Aquila European Renewables Income (AERI) has negotiated an additional power purchase agreement for the Albeniz project. AERI’s subsidiary owns 100% of Albeniz, a solar PV project located in Spain, which was acquired in December 2020. The project is currently under construction, with completion expected by the first quarter of 2022. The additional PPA has a term of five years, with a baseload structure and increases Albeniz total P50 production hedging from 60% to 80% (over five years). In coordination with the investment advisers’ Merchant Market Desk, AERI was able to secure the new PPA at an attractive price, representing a notable increase compared to the existing PPA in place, reflecting the current market environment for power prices in Iberia. 

  • Caledonia Investments (CLDN) has sold its holding, BioAgilytix, to international private equity firm Cinven. Caledonia’s gross proceeds were $183m, net of fees, as expected. In addition, Caledonia has agreed to re-invest $42m from the proceeds, alongside Cinven and a consortium of investors including Cobepa, for a minority investment in BioAgilytix. Caledonia’s net proceeds are $141m, net of fees and re-investment, of which $138m was received on completion.

  • The board of Greencoat UK Wind (UWK) notes that investment management firm Schroders has agreed to acquire a 75% shareholding in Greencoat Capital, the investment manager of Greencoat UK Wind. There is no change expected to the relationship with the investment manager, and the Greencoat Capital team that has led Greencoat UK Wind for the past nine years will remain in place. There is also no change to the investment strategy, which continues to be overseen by the board and approved by the shareholders.

  • NewRiver REIT (NRR) has exchanged contracts to sell Templars Square Shopping Centre in Cowley, Oxford,  for £38.8m, reflecting a 4.9% premium to the asset’s latest valuation. Last month Oxford City Council granted planning permission enabling a 236,000 sq ft of mixed-use regeneration of the site. The consented scheme includes 226 new homes and major improvements to the public realm. The sale is expected to complete in the first quarter of 2022. Proceeds will be used to reduce net debt and, on completion, will improve the group’s pro forma 30 September 2021 loan to value (LTV) of 38.0% by a further 300 basis points.

  • Impact Healthcare REIT (IHR) has agreed a £75m long-term debt facility provided by two large UK insurance companies. The group has entered into an agreement to issue £75m of senior secured notes, comprising two tranches with a weighted average coupon of 2.967%, and a weighted average maturity of 14 years. The two tranches comprise: £37m of notes at a fixed coupon of 2.932% which were issued on 21 December 2021 and mature in December 2035; and £38m of notes at a fixed coupon of 3.002% which will be issued on 20 June 2022 and mature in June 2035. The notes represent the group’s debut transaction in the institutional debt market and provide it with long-term, fixed-rate debt. The first tranche has lengthened the group’s weighted average debt term to 4.7 years, and this will increase further upon draw down of the second tranche in June. Following drawdown of the first tranche on 21 December 2021, £10m of the group’s revolving credit facility with Metro Bank has been cancelled. The remainder of the proceeds will be used to fund the group’s pipeline of investments. The group’s LTV is around 21% based on gross assets as at 30 September 2021. 

  • Land Securities (LAND) has completed the acquisition of an additional 25% share in Bluewater shopping centre in Kent from Lendlease Retail Partnership for £172m representing a net initial yield of 8.15% and an equivalent yield of 8.25%. In a separate deal, the group will sell 25% of this share to co-owner M&G for its pro rata share of the purchase price with the deal completing in April 2022, at which point LAND’s ownership of Bluewater will be 48.75%. Bluewater is one of the UK’s largest out of town shopping centres with an annual turnover in excess of £1bn and a catchment population of 3.9 million people.

We also have an update from Crystal Amber following its continuation vote, while LondonMetric and UK Commercial Property REIT both announced sizable acquisitions.

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