reporter2
12-08-13, 10:22
http://www.businesstimes.com.sg/archive/monday/premium/top-stories/era-realty-sold-over-100m-20130805
Published August 05, 2013
ERA Realty sold for over $100m
Buyer is Indonesian private equity player Northstar
By Felda Chay
[SINGAPORE] The Republic's biggest real estate agency ERA Realty Network has been sold for over $100 million to Indonesian private equity firm Northstar Group, months after owner Harry Chua put it on the market.
The price is shy of the $150 million that Mr Harry Chua's Hersing Corporation is said to have asked when it put up for sale the master franchise rights to the ERA name in Asia-Pacific.
Sources said that the final touches to the deal are still being added, but the sale will include Hersing's Singapore franchise rights to Coldwell Banker, which is currently a dormant business here.
Both the ERA and Coldwell Banker brands are owned by US real estate brokerage Realogy Holdings Corp. In Singapore, ERA employs over 5,000 agents - making it the biggest agency by number of agents - and handles billions of dollars worth of deals annually, which account for the bulk of Hersing's profit.
BT understands that Northstar agreed to acquire ERA on the condition that Jack Chua, who was previously running the show at ERA, returns to head the agency.
Mr Jack Chua is widely known to have helped Mr Harry Chua to grow the agency's reach in Singapore, and is ERA's leading dealmaker. The two are not related.
In January this year, however, a group-wide restructuring exercise saw Richard Tynes, previously Hersing's chief investment officer, take over to lead ERA, while Mr Jack Chua started helping Hersing set up and grow the Singapore outpost of famed Hong Kong dim sum chain Tim Ho Wan - which opened at Plaza Singapura in April. Hersing owns the franchise rights to the Tim Ho Wan brand for the Asia-Pacific region.
On top of bringing Mr Jack Chua on board again, BT understands that ERA's new owner has also offered the agency's top management some share incentives. Said a source: "Northstar is using this to tie down the senior management and ensure that they stay, since the agency business is dependent on the individuals leading the agency."
Northstar is co-founded by Patrick Walujo - the son-in-law of Theodore Rachmat, one of Indonesia's richest men who previously ran auto distributor Astra International. Mr Walujo is currently a managing partner at Northstar, which is part-owned by TPG Capital, a US-based buyout firm.
Northstar manages more than US$1.2 billion in committed equity capital dedicated to South-east Asia, with a focus on Indonesia. Last November, it bought a controlling 50.05 per cent stake in Singapore-listed Nera Telecommunications from Norway-based power conversion firm Eltek ASA. Northstar then attempted but failed to buy up the entire firm in a mandatory takeover bid.
Mr Harry Chua's move to sell the ERA and Coldwell Banker franchise rights comes after he took Hersing private in November last year, after it spent 14 years as a listed company.
The 66-year-old brought the ERA brand into Singapore in 1982 when it was still an unknown US name, and set up shop in a 2,000 sq ft office on the fifth floor of Plaza Singapura.
In 1998, he listed Hersing, which was made up mostly of the ERA business, on Sesdaq - then the secondary board of the Singapore Exchange. Two years later, Hersing was upgraded to the mainboard.
Its rights to the ERA brand cover Asia-Pacific and are perpetual renewal rights, renewable every 30 years. ERA has about 9,000 agents across the region in markets such as Japan, Taiwan, Thailand, Korea, Malaysia and China.
Most are located in Singapore, where ERA has 5,192 agents, according to data from the Council for Estate Agencies.
Hersing's earnings have largely been driven by the ERA business in Singapore, which in 2011 was involved in over 35,000 transactions with a total property value of about $17 billion, according to Hersing's annual report that year.
This, together with business from Coldwell Banker and real estate course provider RIA School of Real Estate, translated into profit after taxation of $13.7 million for Hersing in 2011. Together, the three real estate businesses accounted for 86 per cent of the $274.2 million in total revenue that Hersing made that year.
Published August 05, 2013
ERA Realty sold for over $100m
Buyer is Indonesian private equity player Northstar
By Felda Chay
[SINGAPORE] The Republic's biggest real estate agency ERA Realty Network has been sold for over $100 million to Indonesian private equity firm Northstar Group, months after owner Harry Chua put it on the market.
The price is shy of the $150 million that Mr Harry Chua's Hersing Corporation is said to have asked when it put up for sale the master franchise rights to the ERA name in Asia-Pacific.
Sources said that the final touches to the deal are still being added, but the sale will include Hersing's Singapore franchise rights to Coldwell Banker, which is currently a dormant business here.
Both the ERA and Coldwell Banker brands are owned by US real estate brokerage Realogy Holdings Corp. In Singapore, ERA employs over 5,000 agents - making it the biggest agency by number of agents - and handles billions of dollars worth of deals annually, which account for the bulk of Hersing's profit.
BT understands that Northstar agreed to acquire ERA on the condition that Jack Chua, who was previously running the show at ERA, returns to head the agency.
Mr Jack Chua is widely known to have helped Mr Harry Chua to grow the agency's reach in Singapore, and is ERA's leading dealmaker. The two are not related.
In January this year, however, a group-wide restructuring exercise saw Richard Tynes, previously Hersing's chief investment officer, take over to lead ERA, while Mr Jack Chua started helping Hersing set up and grow the Singapore outpost of famed Hong Kong dim sum chain Tim Ho Wan - which opened at Plaza Singapura in April. Hersing owns the franchise rights to the Tim Ho Wan brand for the Asia-Pacific region.
On top of bringing Mr Jack Chua on board again, BT understands that ERA's new owner has also offered the agency's top management some share incentives. Said a source: "Northstar is using this to tie down the senior management and ensure that they stay, since the agency business is dependent on the individuals leading the agency."
Northstar is co-founded by Patrick Walujo - the son-in-law of Theodore Rachmat, one of Indonesia's richest men who previously ran auto distributor Astra International. Mr Walujo is currently a managing partner at Northstar, which is part-owned by TPG Capital, a US-based buyout firm.
Northstar manages more than US$1.2 billion in committed equity capital dedicated to South-east Asia, with a focus on Indonesia. Last November, it bought a controlling 50.05 per cent stake in Singapore-listed Nera Telecommunications from Norway-based power conversion firm Eltek ASA. Northstar then attempted but failed to buy up the entire firm in a mandatory takeover bid.
Mr Harry Chua's move to sell the ERA and Coldwell Banker franchise rights comes after he took Hersing private in November last year, after it spent 14 years as a listed company.
The 66-year-old brought the ERA brand into Singapore in 1982 when it was still an unknown US name, and set up shop in a 2,000 sq ft office on the fifth floor of Plaza Singapura.
In 1998, he listed Hersing, which was made up mostly of the ERA business, on Sesdaq - then the secondary board of the Singapore Exchange. Two years later, Hersing was upgraded to the mainboard.
Its rights to the ERA brand cover Asia-Pacific and are perpetual renewal rights, renewable every 30 years. ERA has about 9,000 agents across the region in markets such as Japan, Taiwan, Thailand, Korea, Malaysia and China.
Most are located in Singapore, where ERA has 5,192 agents, according to data from the Council for Estate Agencies.
Hersing's earnings have largely been driven by the ERA business in Singapore, which in 2011 was involved in over 35,000 transactions with a total property value of about $17 billion, according to Hersing's annual report that year.
This, together with business from Coldwell Banker and real estate course provider RIA School of Real Estate, translated into profit after taxation of $13.7 million for Hersing in 2011. Together, the three real estate businesses accounted for 86 per cent of the $274.2 million in total revenue that Hersing made that year.