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Case Study

Sale of Severn Trent Property Limited

In early 2006, Severn Trent plc announced that it was to focus on its core water activities.  This necessitated the sale of all non-core assets and businesses.

Jones Lang LaSalle Corporate Finance was mandated in May 2006 to undertake the sale of Severn Trent plc’s property division, Severn Trent Property Limited (“STP”).  STP incorporated 12 companies, 2 Joint Ventures, a number of developments, interests in land, tax losses, other assets and liabilities as well as the management team.

Pre-marketing preparation and vendor due diligence included a complete top down/bottom up analysis of the Company, its structure, assets and enterprise value.  Jones Lang LaSalle Corporate Finance identified a strategy and separated out assets that would fetter a share sale.  Full due diligence and financial analysis was undertaken and an asset/portfolio rationale was identified.  An Information Memorandum was prepared which provided comprehensive sale data.

Following the circulation of the initial information packs to some 100 potential purchasers, a shortlist of 12 purchasers were selected and provided with the detailed Information Memorandum.  A shortlist of four purchasers were selected to proceed to a final stage of bidding.

The sale of STP was successfully completed in November 2006, within three weeks of selecting the final party, ProLogis, for a sale price of £71.7 million, more than twice the book value of the business. The sale was achieved with minimal ongoing liabilities for Severn Trent plc.

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