Brookfield Business Partners (BBU) and its institutional investors have signed a deal worth $5 billion to acquire Modulaire Group. The buyout is expected to close by the end of 2021.
Brookfield Business Partners is the flagship listed business services and industrials company of Brookfield Asset Management (BAM), a leading global alternative asset manager with assets under management (AUM) of over $600 billion.
With a global fleet of about 260,000 modular units across 25 countries, Modulaire provides customers a wide range of solutions for temporary space requirements.
The deal is expected to be funded with nearly $1.6 billion of equity and $500 million in cash, with the balance funded by institutional partners. (See Brookfield Business Partners stock chart on TipRanks)
Managing Partner at Brookfield Business Partners Anuj Ranjan said, “We look forward to bringing our global scale and capabilities in owning and operating leading infrastructure services businesses to support Modulaire’s growth, in partnership with the management team.”
On June 11, Credit Suisse analyst Andrew Kuske upgraded the stock rating to a Buy and assigned a price target of $52, which implies 11.1% upside potential from current levels.
Kuske is of the opinion that Brookfield Business Partners’ exposure is benefiting from the scale of the economic recovery.
Consensus among analysts is a Strong Buy based on 4 unanimous Buys. The average Brookfield Business Partners price target stands at $57.33 and implies upside potential of 22.5% from current levels.