Administration outsourcer Link Group has entered into a binding agreement to acquire the asset servicing unit of UK firm Capita for $1.493 billion.
Link Group's acquisition of Capita Asset Services (CAS) will be funded via an $883 million capital raising and a new $816 million acquisition debt facility.
CAS providers third party administration, share registry services, trustee services and loan processing.
According to a statement released by Link Group, the acquisition is subject to regulatory approval and is expected to complete by 31 December 2017.
Following the acquisition, Link Group anticipates it will have a pro forma net debt to EBITDA ratio of approximately 2.8x.
"Given the high cash flow generation of the combined group, Link Group considers this initial leverage target to be the right balance," said the statement.
Link Group managing director John McMurtrie said, "CAS is highly complementary to Link Group and represents an attractive platform for our company’s further
expansion into the UK and European markets.
"Whilst Link Group has been a market leader in Australia for a number of years and has had a presence in Europe, with the acquisition of CAS, we can say that Link Group is now a truly international company with expanded opportunities for further growth."
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