Cromwell announced in an ASX statement that it will purchase a 50 per cent stake of Oyster Property Group for an initial payment of NZ$5 million, with a further NZ$2.5 million to be paid during the next two years if targeted financial performance is achieved.
Cromwell said additional outperformance payments will also be possible during the period.
The ASX statement said the remaining 50 per cent will continue to be owned by Oyster directors, including chief executive Mark Schiele.
Oyster has a total of NZ$650 million in property assets under management, which includes private property syndicates and institutional property management mandates, according to Cromwell.
Cromwell said that Oyster manages 24 separate unlisted property funds for a combined value of NZ$343 million and also manages NZ$315 million of assets owned by institutional investors.
Cromwell chief executive Paul Weightman said Oyster has many similarities to Cromwell and would provide “a solid platform for the group’s expansion into New Zealand”.
“Oyster is a full service property fund manager that has also taken on the management of externally-owned institutional property portfolios,” said Mr Weigthman.
“The Oyster management team are very capable and experienced and is culturally and philosophically aligned to Cromwell with a strong track record of performance.”
Mr Weightman said the structure of the acquisition will be modelled on the share ownership model of the Phoenix Portfolios business which is partly owned by Cromwell.
This model encourages senior management to build the business with Cromwell providing strategic and capital assistance, said Mr Weigthman.
“The existing Oyster management team has laid a strong foundation and we see tremendous potential for growth with the prudent application of the capital resources and expertise of Cromwell,” he said.
