Brookfield paid US$1.1 billion ($1.6 billion) for La Trobe, including a performance hurdle payment. It has pledged to contribute US$765 million ($1.1 billion) in equity and fund the rest with debt.
On equity, Brookfield Business Partners, Brookfield’s Toronto Stock Exchange and NYSE-listed investment vehicle, took US$250 million ($364 million), while its institutional clients covered the rest. .
Bankers, rival buyout firms and credit investors are eager to see where the deal price stands. Big Aussie dollar TLBs are thin on the ground, and recent market volatility has made them even thinner.
It is well known that the cost of funding private equity leveraged buyouts has skyrocketed this year and was already 50 to 100 basis points higher in May. This is the first big test since.
Brookfield bought La Trobe from US private equity giant Blackstone, which acquired 80% of the company in 2017 after 65 years of family ownership.
After four odd years of owning La Trobe, Blackstone hired bankers from Goldman Sachs to weigh a trade sale or float, the latter in the vein of Pepper Money, Liberty Financial Group and Latitude Financial.
La Trobe had $13 billion in assets under management for some 50,000 retail investors. It was expected to make a net profit of $145 million in fiscal 2022.