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Sun Life to buy GreenOak, merge with Bentall Kennedy

Sun Life Financial (SLF-T) will merge its real estate property management arm Bentall Kennedy wit...

Sun Life Financial (SLF-T) will merge its real estate property management arm Bentall Kennedy with U.S.-based GreenOak Real Estate and become the majority shareholder of the new entity, to be known as Bentall GreenOak, the company announced early Wednesday.

Sun Life will pay $195 million for a 56 per cent interest in the combined Bentall GreenOak, with GreenOak shareholders owning the remaining 44 per cent. Bentall GreenOak will then become part of Sun Life Investment Management.

“This transaction is right on strategy, broadening our asset management pillar by expanding the capabilities of our alternatives manager, Sun Life Investment Management,” said Dean Connor, president and CEO of Sun Life Financial, in a release. “Combining the strengths of two leading and globally respected real estate investment managers will bring clients a broader range of investment solutions that include core, core plus and value-add real estate, plus senior and tactical real estate debt strategies across North America, Europe and Asia.”

GreenOak Real Estate is a global real estate investment firm with approximately $14 billion in assets under management and nine offices around the world. It has offices in Los Angeles and New York, as well as London, Madrid, Milan, Luxembourg, Paris, Tokyo and Seoul.

Sun Life option to acquire 100 per cent

Senior management of Bentall GreenOak will include executives from both Bentall Kennedy and GreenOak. Sun Life acquired Bentall Kennedy in 2015.

It will have an option to acquire the remaining interest in Bentall GreenOak approximately seven years from the closing of the transaction.

Sun Life Financial will also acquire the right to a portion of the GreenOak shareholders’ share of Bentall GreenOak net income in exchange for a fixed amount to be paid in quarterly instalments. This will give it rights to approximately 90 per cent of Bentall GreenOak earnings (prior to Sun Life exercising its option to increase its ownership stake).

“Combining Bentall Kennedy with GreenOak extends our capabilities in real estate investment solutions, in a complementary way and increases Sun Life Investment Management’s total assets under management to $75 billion,” said Steve Peacher, president of Sun Life Investment Management, in the release.

The company says it expects the transaction to be accretive to earnings per share and return on equity in 2019 by $0.04 and 60 basis points, respectively. The transaction will be financed through surplus cash and is expected to close in the first half of 2019.

It remains subject to regulatory approvals and customary closing conditions.

Berkshire Global Advisors served as financial advisor and Weil, Gotshal & Manges LLP as legal advisor to Sun Life.

About Sun Life 

Sun Life Financial is an international financial services organization providing insurance, wealth and asset management solutions to individual and corporate clients. Sun Life Financial has operations in Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of Sept. 30, 2018, Sun Life Financial had total assets under management of $984 billion.

Sun Life Investment Management comprises Sun Life Institutional Investments (Canada) Inc. and Bentall Kennedy (Canada) Limited Partnership in Canada, and Prime Advisors Inc., Ryan Labs Asset Management and Bentall Kennedy (U.S.) Limited Partnership in the United States.

These operations have combined third-party assets under management of $61 billion as of Sept. 30, 2018. Sun Life Investment Management is supported by the investment division of Sun Life Assurance Company of Canada that manages $146 billion in assets under management for the Sun Life Financial group of companies.

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