Brookfield takes minority stake in SBB’s public education portfolio

• The price was between a 2.7% discount and 2.7% premium to the book value as of Q3 2022
• SBB will hold the remaining 51% stake
• The portfolio includes preschools, elementary schools, upper-secondary schools and universities

Brookfield Asset Management acquired a 49 percent stake in the social infrastructure portfolio for public education of Sweden’s SBB. The deal, via Brookfield’s open-ended core infrastructure fund Super-Core Infrastructure Partners, was for around Skr9.2 billion ($867 million; €840 million) in cash up front and around Skr1.2 billion in cash through earn-outs.

The price was between a 2.7 percent discount and 2.7 percent premium to the book value as of the third quarter this year, depending on the value of the earn-outs achieved. The earnouts expire after six years from the first closing of the deal, based on achieved refinancing terms and achieved net operating income yield on new developments and acquisition. The total payable to SBB from Brookfield for earn-outs will not top Skr1.2 billion.

SBB’s Skr44.9 billion portfolio will move to the newly formed SBB subsidiary EduCo, in which Brookfield has taken its minority stake. SBB holds the remaining 51 percent.

The portfolio includes preschools, elementary schools, upper-secondary schools and universities.

EduCo will invest and manage social infrastructure assets within the public-backed education sector in Sweden, Denmark, Norway and Finland, and will be the main vehicle for SBB’s opportunities within the public education sector.

The EduCo portfolio will consist of 585 income producing assets spread across the Nordic region – 55 percent by GAV in Sweden, 38 percent in Norway, 5 percent in Finland and 2 percent in Denmark.

“This is a sought after and resilient asset class, underpinned by the essential nature of the underlying assets and its predictable, inflation-secured cash flows under very long contracts,” said Eduardo Salgado, a managing partner in Brookfield’s infrastructure group and head of Brookfield Super-Core Infrastructure Partners, in a statement. “This partnership is highly attractive for us given SBB’s extensive experience in working with municipalities and publicly funded operators in the Nordics within the educational sector.”

SBB is a social infrastructure asset manager headquartered in Sweden.

Brookfield is an alternative asset manager with over $750 billion of assets under management across infrastructure, real estate, renewable power and transition, private equity and credit. It is headquartered in Toronto, Canada.