Lone Star sells Isaria to Deutsche Wohnen for €600m

The deal is valued at around €600m, according to a statement from Deutsche Wohnen. The deal is expected to be completed by the end of 2020.

According to a statement from sell-side adviser Sullivan & Cromwell, the deal is valued at €200m, plus assumption of certain debt, implying a debt portion of €400m in the total deal value.

Separately, Deutsche Wohnen announced that it is launching a €30m fund to provide coronavirus-related support to its commercial and residential tenants, including small businesses.

Lone Star began to explore sale options for Isaria, including a flotation, in May 2019. The company's expected valuation was around €500m at the time.

Lone Star bought a majority stake in Isaria in 2016 via bidco LSREF4 Aria Beteiligungs in a public takeover offer to de-list the company from the Frankfurt Stock Exchange. The GP acquired approximately 92.39% of the company's shares, according to a statement from Isaria at the time. Shares were priced at 450 euro cents each, amounting to a company valuation of €106m. Lone Star deployed equity from Lone Star Real Estate Fund IV.

Lone Star had not responded to a request for comment at the time of publication.

Company
Isaria is a Munich-based residential property developer. It manages properties in Munich and greater Munich, and has more recently expanded its activities to Hamburg.

The company reported EBITDA of €39m and revenues of €142m in 2018, according to Reuters. It reported revenues of €100m at the time of its acquisition by Lone Star. The company has 90 employees and was founded in 1990.

People
Deutsche Wohnen – Michael Zahn (CEO).
Isaria – Peter Finkbeiner (CEO).

Advisers
Vendor – Victoria Partners (M&A); Sullivan & Cromwell (legal).

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