Nomura’s Deutsche Annington in largest continental European VC deal

Bundeseisenbahnvermögen, the German federal authority, has sold 114,000 flats to private equity investors. Deutsche Annington Immobilien, a subsidiary of Nomura, has bought 64,000 of the flats.

German federal authority Bundeseisenbahnvermögen has sold 114,000 flats for DM7.6bn (E3.8bn) in the largest ever-private equity deal in continental Europe. Deutsche Annington Immobilien GmBH, a company formed and financed by Nomura International plc’s Principal Finance Group has acquired of 64,000 of the flats for DM4.1bn (E2bn). The remainder of the flats have been sold to public and private companies in Germany. The properties are mainly railway workers' flats.

Kreditanstalt fuer Wiederaufbau (KfW) and Landesbank Hessen-Thueringen Girozentrale provided a DM1.63bn structured term loan for Deutsche Annington. Nomura International is meeting the balance of the consideration. A DM1.4 billion of existing debt remains in place.

Guy Hands, managing director of Nomura's Principal Finance Group, said: “We are delighted to have concluded our first transaction in Germany and the largest ever private equity deal in continental Europe. In addition, we have now established a successful relationship with two of Germany’s leading lenders. This deal has taken three and a half years to consumate and we now look forward to making further investments across Europe.

“We also look forward to fulfilling our social obligations under the terms of this deal and to providing the opportunity for the tenants to benefit from the potential of home ownership for the first time.” The social obligations include limits on rent increases for the next 10 years.

Schroder Salomon Smith Barney assisted Nomura International’s principal finance group in reviewing finance options for the acquisition.