SBB Norden (SBB) M&A Announcement summary

Deal rationale and strategic fit

• Transaction completes a multi-year transformation, simplifying the group and focusing on three core segments: Education, Residential, and Social/Community assets, each with critical mass and investment grade ratings.

• Sale of Social Platform/Community assets to PPI enables specialized management teams and supports focused growth in core markets.

• Positions the company as the market leader in Europe for social infrastructure, residential, and education property platforms, leveraging demographic tailwinds and stable, government-backed income streams.

• SBB retains minority stakes in market-leading, investment grade-rated brands, ensuring continued exposure to stable income streams.

Financial terms and conditions

• SBB sells or transfers assets worth up to SEK 35 billion (including approximately 740 community properties valued at SEK 32bn) to PPI, receiving more than SEK 11 billion in net proceeds and shares in PPI.

• SBB increases its holding in PPI to 39.99% of shares (33.34% of votes), remaining the largest shareholder, with a NAV of SEK 20bn.

• SEK 15 billion of secured debt leaves the group, and SBB will not consolidate PPI post-transaction.

• Transaction value is about 8% below the last reported GAV for the assets.

• Net proceeds will be used to reduce debt, enhance liquidity, and provide growth capital, with SEK 1.7–1.8 billion allocated to parent bond repayment and SEK 9 billion for further debt reduction.

Synergies and expected cost savings

• Administrative and operating cost savings are expected to reach SEK 100 million annually due to simplification and staff optimization.

• Financial synergies are estimated at up to SEK 400 million per year from lower cost of debt.

• Enhanced liquidity and leverage reduction, with LTV reduced by 200bps post-transaction.

• Streamlined corporate structure eliminates costly joint ventures and redundant ratings.

• Administrative expense reductions and improved cash flow anticipated.