PAI Partners in partial exit from Kaufman & Broad

The sale of shares, priced at €31.5 apiece, amounts to an approximate total of €257m and represents 39.08% of Kaufman & Broad's share capital. The transaction was set up as a private placement to institutional investors by way of a bookbuilding. 

The overallotment option represents up to 10% of the total number of shares initially offered and is exercisable until 27 May 2016. In case of the full exercise of the overallotment option, the final proceeds from the sale will amount to €282m.

Proceeds will be used by Financière Gaillon 8 to fully redeem the senior notes, due 2019 and amounting to €370m, issued in March 2014.

Kaufman & Broad will also purchase some of its own shares from Financière Gaillon 8 at the same share price for a total amount of €50m. Furthermore, Artimus Participations, a company held by managers and employees of the group, will proceed with the acquisition of a stake in Kaufman & Broad from Financière Gaillon 8 at the same share price, for a total of €30m. Artimus Participations shareholders committed to hold their participation for a period of two years.

The shares purchased by Kaufman & Broad will be allocated in priority to financing acquisitive growth transactions, and to hedging its employees' bonus share plans. 

Following the placement, the share buy-back by Kaufman & Broad and the share purchase by Artimus Participations, Financière Gaillon 8 will hold a stake representing 39.67% of the share capital and 59.74% of the voting rights of Kaufman & Broad, excluding the overallotment option. In the case of the full exercise of the overallotment, it will hold 35.76% of the share capital and 55.48% of the voting rights.

All parties committed to a lock-up period of 180 days. BNP Paribas, Goldman Sachs International and Crédit Agricole CIB acted as global coordinators, lead managers and joint bookrunners for the placement, with Natixis as joint bookrunnner.

Kaufman & Broad's French subsidiary completed its IPO in 2000, offering approximately 5.78 million shares at a price of €23 per share, representing a total offering of €132m.

Previous funding
In 2007, PAI purchased a 50.28% shareholding in Kaufman & Broad from US-based parent company KB Home and company chairman and CEO Guy Nafilyan.

The unitary share price of €50.17, excluding an interim dividend of €4.83, valued the business at approximately €1.1bn.

The acquisition, made through holding company Financière Gaillon 8, generated gross proceeds of approximately $800m for KB Home.

Company
Kaufman & Broad is a French developer and builder of homes and apartments, focused on mid- to high-end construction.

Advisers
Equity – Rothschild & Cie (corporate finance).

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