Straits Trading Acquires JL Family Office’s Stake in Straits Real Estate for $105 Million in Cash

05 Apr 2021

• Straits Trading to acquire JL Family Office’s stake in Straits Real Estate, as JL Family Office seeks to divest its stake at end of a successful investment cycle
• Post-transaction, Straits Real Estate will become a fully owned subsidiary of Straits Trading
• Both parties will continue to collaborate on future projects

The Straits Trading Company Limited (“Straits Trading” or “the Group”) today announced that its wholly-owned subsidiary, STC Capital Pte Ltd and JL Equity II Limited, a unit of the JL Family Office (“JLFO”), has entered into a Share Sale and Purchase Agreement for the proposed acquisition of JLFO’s 10.5% stake in Straits Real Estate Pte. Ltd. (“SRE”) for an aggregate consideration of $105.0 million. The acquisition comes as JLFO seeks to divest its stake in SRE at the end of its successful investment cycle.

Post-transaction, SRE, will become a fully owned subsidiary of the Group. The completion of the transaction is scheduled on 9 April 2021 and it will be fully funded by the Group’s internal cash resources.

The proposed acquisition will enable Straits Trading to deliver enhanced long-term growth and capital returns to its shareholders. On a pro forma basis for FY2020, it is also earnings per share (“EPS”)-accretive for the Group.

Now in its eighth year of business operation since its formation, SRE’s well-diversified investment portfolio spans six countries and various property asset classes. Its portfolio comprises mainly income-generating assets with stable and recurring cash flow. SRE has been increasing its exposure to future-ready and resilient sectors, such as modern logistics and business parks, to benefit from the new economy businesses.

Ms Chew Gek Khim, Executive Chairman of Straits Trading said, “SRE has established a strong track record of delivering superior risk-adjusted returns. The acquisition represents a material investment in one of Straits Trading’s key business units, providing shareholders with enhanced long-term growth prospects and capital returns. We value the deep and long-standing relationship with JLFO and will continue to pursue opportunities with them in the future.”

Mr Andy Lim, Group CEO of JLFO said, “We built SRE together with Straits Trading since its inception in 2013 and are pleased that all stakeholders have benefited from SRE’s growth trajectory. Having reached the end of a successful investment cycle, it is time to divest our stake in SRE and rotate our capital into other opportunities. We have enjoyed our working relationship with Straits Trading immensely and look forward to continuing our collaboration on future projects through our real estate unit, The Land Managers.”

Note: This Joint Media Release should be read in conjunction with the announcement released by The Straits Trading Company Limited via SGX on 5 April 2021.

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