Deal: Hong Kong Private Equity Firm Baring Sells For $7.5B
There’s a big new deal in the private equity world. Baring Private Equity Asia, a Hong Kong-based private equity giant, is getting acquired by EQT Partners, a publicly-traded Swedish private equity firm. It represents one of the biggest private equity roll-ups lately.
- EQT will pay 6.8 billion euros ($7.5bn) to buy Baring; 1.5 billion euros ($1.7bn) in cash and 5.3 billion euros ($5.8bn) with newly issued EQT shares.
Baring is one of Asia’s biggest and most successful private equity firms. It manages roughly 18 billion euros ($20bn) of assets. Likewise, EQT is one of Europe’s leading private equity firms, managing 73 billion euros ($81bn) of assets as of January.
EQT will merge Baring’s operations with its own Asian business to become a much stronger private equity firm. Once the acquisition closes, the Swedish private equity firm will have more than 20 billion euros ($22bn) of assets invested in Asia.
EQT has lately used acquisitions to grow its global investing business. Last year, it bought Exeter Property Group, an American real estate investor, for $1.9bn.
- Baring’s $7.5bn deal marks one of the largest private equity firm acquisitions globally and more so in Asia. The price tag is pretty high, especially for a firm that expects to generate between €350mn to €375mn in management fees this year, according to EQT.
- Baring’s investment activities are primarily in Asia, where it has acquired stakes in numerous technology, healthcare, and financial services companies. Its portfolio is a mix of privately-held and publicly-traded companies. Notable holdings include Chinese drug developer Hutchmed, Israeli medical device maker Lumenis, and Korean lender Acuon Capital.
Baring Private Equity Asia (BPEA) was founded in 1997 as a subsidiary of Baring Private Equity Partners (BPEP), a London-based investing firm. In 2000, Jean Salata, an executive at Baring Private Equity Asia, led a management buyout of the firm. Salata has been the firm’s Chief Executive and biggest shareholder ever since and is in line for a big haul from its sale.
EQT Partners is a Swedish private equity firm founded in 1994. It listed on the Nasdaq Stockholm exchange in 2019 (STO: EQT) and has a current market value of 340 billion Swedish crowns ($36bn).
- Private equity firms enjoyed a stellar year in 2021, which witnessed record fundraising and investments. According to PitchBook, the private equity industry struck $1.2 trillion worth of deals in 2021, topping the previous annual record by 64%. EQT wasn’t left behind in the boom; its annual revenue rose from 762 million euros ($842mn) in 2020 to 1.6 billion euros ($1.8bn) in 2021.
If all goes as planned, the acquisition will close in the fourth quarter of 2022.