Cromwell to acquire Orchard
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Publicly listed investment group Cromwell has entered into an exclusive due diligence arrangement to acquire Orchard Funds Management.
Cromwell has announced to the Australian Securities Exchange (ASX) that it has entered into the due diligence period with a view to acquiring Orchard’s funds, including the $960-million Orchard Diversified Property Fund.
However, it said the acquisition would not include Orchard’s Primary Infrastructure Fund or the Essential Health Care Fund.
Commenting on the acquisition move, Cromwell chief executive Paul Weightman said the transaction, if it proceeded, would substantially expand Cromwell Group’s existing property funds management business.
He said that if Cromwell assumed management of the funds, it would look to undertake a combination of asset sales, either externally or into new Cromwell managed funds, coupled with further capital raisings in existing Orchard funds once asset values and funds were stabilised.
The ASX announcement said the transaction involved a payment of $15 million for management rights plus a further three-year earn-out amount to be determined.
AUTHOR
Mike Taylor
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