TPG and Patron Capital sell their investment in Merin

TPG, the global alternative asset firm, and Patron Capital Partners (“Patron”), the pan-European institutional investor focused on property-backed investments,  have entered into definitive documentation for the sale of their investment in Merin, one of the largest commercial real estate platforms in the Netherlands, to Dream Global REIT (TSX:DRG.UN) for a total consideration of €622 million.

Merin was acquired by TPG Real Estate, TPG Sixth Street Partners (TSSP) and Patron in 2012, in a complex transaction that represented the first restructuring of a European commercial mortgage-backed securitisation at legal final maturity.

Under TPG Real Estate, TSSP and Patron’s ownership, Merin has been transformed into one of the largest and most successful Dutch real estate platforms.  A new management team led by Bas van Holten has substantially repositioned the portfolio through a combination of asset management, refurbishment and over 50 acquisitions and disposals.  The sale represents the third significant transaction for Merin this year following a significant add-on acquisition and a €440 million refinancing.

Today, Merin is dedicated to the creation of high-quality, sustainable and tenant-focused modern working environments, with approximately 170 office and industrial assets. Due to a strong focus on tenant satisfaction, Merin has one of the highest customer satisfaction scores in the Netherlands and has significantly improved occupancy and tenant retention since the initial acquisition.

Anand Tejani, Partner at TPG Real Estate, commented: “Having acquired Merin through an innovative and complex transaction in 2012, we are delighted with the successful transformation of the company in collaboration with management and our partners at Patron. This deal is a good example of TPG Real Estate’s thematic approach to investing and building best-in-class real estate platforms.”

Michael Muscolino, Partner at TPG Sixth Street Partners, added: “The Merin investment reflects TSSP’s approach to creating opportunities to unlock value in underlying assets through innovative structuring and execution at the point of investment.  The performance of this platform was a truly collaborative effort and is a testament to our ability to see an opportunity and assemble the right team around it.  We want to thank Bas and the rest of the management team at Merin for executing on our strategy.”

Keith Breslauer, Managing Director & Senior Partner at Patron Capital Partners, said: “This transaction is a further example of Patron’s expertise in acquiring a distressed investment, bolstering the management team, and growing the property-backed business.  Over the last five years, we have worked successfully with our partner, TPG, and the new Merin management team to transform the business into one of the leading real estate investment companies in the Netherlands.”

Bas van Holten, CEO at Merin, added: “We are proud that over the past four years, in partnership with TPG and Patron, we have been able to turn the company around resulting in significant operational improvements and better performance.  Our dedicated team of professionals is highly motivated with a renewed entrepreneurial spirit and a clear focus on client satisfaction. I am excited about Merin’s future prospects and about continuing its growth story.”