Aldar increases synergy estimates and completes merger integration

ABU DHABI: Aldar Properties PJSC confirmed today that it has successfully completed all aspects of its integration significantly ahead of schedule, following the merger with Sorouh in June 2013. The merger brought together two complementary businesses to create greater value for all shareholders and stakeholders. Key to this was the development of a more diversified and sustainable business model with a balance between revenues derived from development projects and stable recurring revenues from its investment properties and asset management activities.

Today, Aldar has a very strong management team that has the experience to take advantage of future growth opportunities. All systems and business processes are completely aligned and all re-branding activity is now complete.

The Company’s initial per annum synergy estimate of AED 90-110 million by 2015, was derived principally from operational efficiencies and interest savings on acquired debt. The Company is pleased to announce that this estimate has been increased by 45% to AED 145-150 million per annum based on stronger than expected operational synergies and revised lower cost of debt acquired in the acquisition, a significant proportion of which will start to be realised in 2014.

Abubaker Seddiq Al Khoori, Chairman of Aldar Properties said: “the 45% increase in synergy estimates and the ability to complete the merger integration well ahead of schedule reinforces the complementary nature of the two businesses. I am confident that we now have the right team and business processes in place to maximise stakeholder value by creating and managing quality developments.” Aldar’s Chief Strategy Officer, Paul Warren, added: “This was an extremely complex integration of two very large businesses, and the ability to extract so much value from the integration is a testament to the hard work and commitment of the teams who have been working together. Key to the success of the integration has been the development of a detailed strategy to drive the growth of the merged business with the aim of becoming the most trusted and recognised developer in Abu Dhabi.”

Aldar’s Chief Financial Officer, Greg Fewer, commented: “We are pleased that the capital markets have reacted so positively to the merger and Aldar’s cost of capital is lower as a result. We have reduced our overall interest expense significantly and together with the improved operational efficiencies we have created real value for our shareholders.” The integration was a complex process due to the scale of both businesses and involved significant cooperation and commitment from all employees.