Private Equity News & Analysis

‘Strong allegiance’ helps Colony win race for Abraaj LatAm business

Colony’s purchase of the Latin America unit has been at least six months in the making.

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Abraaj Group’s Latin American business will be the first platform to change hands after the firm’s joint provisional liquidators, Deloitte and PwC, signed off a sale to New York real estate specialist Colony Capital.

The transaction is expected to close later this quarter, subject to approvals, according to a Colony statement. Colony’s interest in the business was first confirmed in June and the deal was initially set to complete in December.

Colony’s bid was identified as a front-runner by the JPLs and limited partners in November as the firm had “undertaken extensive due diligence prior to the final bid deadline and has a strong allegiance with the existing Abraaj team members”, according to a Deloitte document seen by Private Equity International.

The Colony deal was viewed as carrying the lowest execution risk and the most likely to provide a timely solution for the LatAm funds. Deloitte declined to comment.

Colony LatAm Partners, as the platform will be known, will manage more than $500 million Its predecessor had deployed $700 million across 22 investments since 2006 and targets mid-market companies in Mexico, Colombia, Peru and Chile.

The deal marks the first in a lengthy sale process for Abraaj’s platforms. Actis is in exclusive negotiations for the purchase of Abraaj’s Africa and South-East Asia businesses, as well as APEF IV, a $2 billion 2011-vintage. The firm reportedly plans a major expansion across Asia and Africa, should the deal go through.

Brookfield Asset Management pulled out of a bid to acquire Abraaj’s Turkey unit in January, according to a Financial News report.

The JPLs were still assessing options for the MENA legacy funds as of November, according to the JPL documents. Possible solutions included expanding the Actis transaction to include these vehicles or accepting a proposal from a large unnamed US-based firm, which would involve a new company managing the funds and selling their assets in an orderly fashion.