Brookfield Business Partners, the private equity arm of Brookfield Corporation, is set to divest partial interests in three of its portfolio companies to a newly established private equity vehicle targeting high-net-worth investors, managed by Brookfield Asset Management, according to a report by Bloomberg.
According to a statement issued Thursday, Brookfield Business Partners will receive units in the new fund valued at approximately $690m, reflecting an 8.6% discount to the net asset value of the underlying assets.
The divestment includes a 12% interest in DexKo, a global manufacturer of trailer components and chassis; a 7% stake in CDK Global, a provider of software solutions for the automotive retail sector; and a 5% stake in scaffolding and industrial services firm BrandSafway. The transaction is expected to complete on Friday.
Following the fund’s initial close later this year, Brookfield expects the units to be redeemed for cash within 18 months, based on the same discount rate. The transaction has been reviewed by an independent financial adviser and external legal counsel, and deemed fair, the firm confirmed.
Commenting on the move, Anuj Ranjan, CEO of Brookfield Business Partners, said the deal will support the firm’s efforts to “accelerate the return of capital under current and future buyback programmes, reinvest in the growth of the business, and reduce corporate leverage.”
