Catena's Bold Move: A Strategic Share Issue and Acquisition in the Logistics Sector
August 29, 2024, 11:38 pm
In a significant maneuver, Catena AB has announced a directed new share issue aimed at raising approximately SEK 3.1 billion. This strategic decision comes on the heels of the company’s ambitious plans to enhance its logistics portfolio, particularly with a new acquisition in Denmark valued at around SEK 5 billion. The landscape of logistics is evolving, and Catena is positioning itself as a key player in this dynamic environment.
The share issue involves the release of 5,487,282 new shares, priced at SEK 557.00 each. This price reflects a slight discount to recent trading averages, indicating a calculated approach to attract institutional investors. The participation of notable entities like Warehouses de Pauw SA and Columbia Threadneedle Investments underscores the confidence in Catena’s strategy.
The backdrop to this share issue is a year of robust investment for Catena. In 2024 alone, the company has successfully deployed SEK 5.1 billion in acquisitions, primarily focusing on logistics properties that promise yields around 6 percent. The acquisition of the Örja 1:22 logistics property in Landskrona has been a standout achievement, demonstrating Catena’s commitment to expanding its footprint in the logistics sector.
Catena’s recent signing of a Letter of Intent (LOI) to acquire a newly built, fully let logistics asset in Denmark is a pivotal part of this strategy. This asset, which will contribute approximately 20% to Catena’s rental income, boasts a high ESG profile and energy-efficient designs. Such features not only enhance the company’s portfolio but also align with the growing demand for sustainable logistics solutions.
The anticipated acquisition is expected to stabilize Catena’s rental income further, thanks to a 14-year rental contract. This will extend the weighted average lease expiry (WALE) from 5.8 years to about 6.8 years, providing a more predictable revenue stream. Moreover, the acquisition will improve Catena’s financial risk profile by extending the average debt maturity from 3.6 years to approximately 4.6 years, which is a prudent move in today’s volatile market.
The logistics sector has seen unprecedented growth in recent years, and Catena is keenly aware of the opportunities that lie ahead. The company’s land bank of 4.6 million square meters, acquired at favorable prices, positions it well to capitalize on future developments. With six ongoing projects and an estimated remaining investment volume of SEK 1.1 billion, Catena is not just resting on its laurels; it is actively pursuing new ventures.
The share issue is designed to unlock potential investment opportunities while maintaining a balanced financial risk profile. The proceeds will support the ongoing development pipeline, facilitate the Danish acquisition, and enable Catena to exploit existing building rights, including sustainable energy projects. This multifaceted approach aims to foster sustained growth per share, aligning with the company’s long-term objectives.
The decision to deviate from shareholders’ pre-emptive rights in this share issue was not taken lightly. The Board of Directors assessed that a directed share issue would diversify the shareholder base and mitigate exposure to market volatility. This strategic choice reflects a forward-thinking mindset, essential in today’s fast-paced financial landscape.
The implications of this share issue are significant. The net proceeds are expected to reduce the loan-to-value ratio from 38.8% to around 31.0%, and the net debt to EBITDA ratio from 8.0x to 6.3x. Such improvements signal a stronger balance sheet and a more resilient company poised for future growth.
Lock-up agreements have been established to ensure stability post-issue. Key stakeholders, including board members and management, have committed to not selling existing shares for 180 days following the settlement date. This move reinforces confidence in Catena’s long-term vision and commitment to shareholder value.
Advisors for this strategic initiative include Carnegie Investment Bank, Swedbank, and Van Lanschot Kempen, ensuring that Catena is well-supported in navigating this complex process. The involvement of these financial institutions adds credibility to the share issue and highlights the seriousness of Catena’s intentions.
In conclusion, Catena AB is making waves in the logistics sector with its recent share issue and planned acquisition. By strategically positioning itself for growth, the company is not just reacting to market trends; it is shaping them. As logistics continues to evolve, Catena’s proactive approach could set the stage for a successful future, marked by sustainability and robust financial health. The coming months will be crucial as the company moves forward with its ambitious plans, and stakeholders will be watching closely.
The share issue involves the release of 5,487,282 new shares, priced at SEK 557.00 each. This price reflects a slight discount to recent trading averages, indicating a calculated approach to attract institutional investors. The participation of notable entities like Warehouses de Pauw SA and Columbia Threadneedle Investments underscores the confidence in Catena’s strategy.
The backdrop to this share issue is a year of robust investment for Catena. In 2024 alone, the company has successfully deployed SEK 5.1 billion in acquisitions, primarily focusing on logistics properties that promise yields around 6 percent. The acquisition of the Örja 1:22 logistics property in Landskrona has been a standout achievement, demonstrating Catena’s commitment to expanding its footprint in the logistics sector.
Catena’s recent signing of a Letter of Intent (LOI) to acquire a newly built, fully let logistics asset in Denmark is a pivotal part of this strategy. This asset, which will contribute approximately 20% to Catena’s rental income, boasts a high ESG profile and energy-efficient designs. Such features not only enhance the company’s portfolio but also align with the growing demand for sustainable logistics solutions.
The anticipated acquisition is expected to stabilize Catena’s rental income further, thanks to a 14-year rental contract. This will extend the weighted average lease expiry (WALE) from 5.8 years to about 6.8 years, providing a more predictable revenue stream. Moreover, the acquisition will improve Catena’s financial risk profile by extending the average debt maturity from 3.6 years to approximately 4.6 years, which is a prudent move in today’s volatile market.
The logistics sector has seen unprecedented growth in recent years, and Catena is keenly aware of the opportunities that lie ahead. The company’s land bank of 4.6 million square meters, acquired at favorable prices, positions it well to capitalize on future developments. With six ongoing projects and an estimated remaining investment volume of SEK 1.1 billion, Catena is not just resting on its laurels; it is actively pursuing new ventures.
The share issue is designed to unlock potential investment opportunities while maintaining a balanced financial risk profile. The proceeds will support the ongoing development pipeline, facilitate the Danish acquisition, and enable Catena to exploit existing building rights, including sustainable energy projects. This multifaceted approach aims to foster sustained growth per share, aligning with the company’s long-term objectives.
The decision to deviate from shareholders’ pre-emptive rights in this share issue was not taken lightly. The Board of Directors assessed that a directed share issue would diversify the shareholder base and mitigate exposure to market volatility. This strategic choice reflects a forward-thinking mindset, essential in today’s fast-paced financial landscape.
The implications of this share issue are significant. The net proceeds are expected to reduce the loan-to-value ratio from 38.8% to around 31.0%, and the net debt to EBITDA ratio from 8.0x to 6.3x. Such improvements signal a stronger balance sheet and a more resilient company poised for future growth.
Lock-up agreements have been established to ensure stability post-issue. Key stakeholders, including board members and management, have committed to not selling existing shares for 180 days following the settlement date. This move reinforces confidence in Catena’s long-term vision and commitment to shareholder value.
Advisors for this strategic initiative include Carnegie Investment Bank, Swedbank, and Van Lanschot Kempen, ensuring that Catena is well-supported in navigating this complex process. The involvement of these financial institutions adds credibility to the share issue and highlights the seriousness of Catena’s intentions.
In conclusion, Catena AB is making waves in the logistics sector with its recent share issue and planned acquisition. By strategically positioning itself for growth, the company is not just reacting to market trends; it is shaping them. As logistics continues to evolve, Catena’s proactive approach could set the stage for a successful future, marked by sustainability and robust financial health. The coming months will be crucial as the company moves forward with its ambitious plans, and stakeholders will be watching closely.