Corestate acquires complementary debt financing platform to offer debt service across all real estate asset classes

• Acquisition of Aggregate Financial Services ("AFS"), a debt financing platform and fully licensed securities trading bank, represents significant milestone towards strengthening Corestate's private debt strategy
• Further development and diversification of the successful real estate mezzanine business with new products, complementary services and regional expansion
• AFS to generate on a stand-alone basis € 15m to € 20m EBITDA in 2021 and at least an additional € 10m of annual run rate synergies
• Net Purchase price of € 113m mainly financed by 8.5m new shares
• AFS founders Sebastian Ernst and Johannes Märklin appointed as Members of the Management Board

Luxembourg, 14 January 2021 - Corestate Capital Group ("Corestate"), a leading independent investment manager for real estate in Europe, today announced the full acquisition of Frankfurt-based Aggregate Financial Services GmbH ("AFS"), a leading debt financing platform and fully licensed securities trading bank.

The transaction will allow Corestate to significantly expand its leading position in the real estate development financing market as well as within the wider real estate sector. The central element of this transaction is also the purchase of a securities trading bank which connects to a broader product range of tailored debt financing solutions in the real estate sector. As a result, the complementary and highly profitable operations at AFS and Helvetic Financial Services ("HFS"), Corestate's private debt business, will join forces. Subsequently, Corestate will have a strong market position as a financing platform through the whole real estate life cycle and thus enjoy a unique cross-selling potential. As part of this transaction, AFS founders and shareholders Sebastian Ernst and Johannes Märklin are appointed as Members of the Management Board of Corestate with immediate effect for a term of three years; they will also become members of the board of directors of HFS.

René Parmantier, CEO of Corestate: "The experience and expertise of AFS complements our strengths in the mezzanine lending business perfectly. This accretive acquisition will enable us to start a new chapter of growth for our already profitable private debt segment, both in terms of clients and in terms of our service offering. I am pleased to be joined by the experienced and highly motivated new colleagues from AFS which have an excellent track-record and an outstanding network of institutional investors across Germany and Europe. In the upcoming years, we as a team will not only substantially grow our debt financing business, but we will also realize significant cross-selling potentials."

Friedrich Munsberg, Chairman of Corestate's Supervisory Board, comments: "For many years, Sebastian Ernst and Johannes Märklin are among the most distinguished German experts in the private debt sphere. We are delighted for them to join forces on a long-term basis with the Corestate team as Members of the Management Board. Together with the current Management Board members, they will further strengthen the successful HFS business and assume further responsibility for the integration of AFS into the wider organisation, fostering significant synergies across the group."

Sebastian Ernst, Managing Partner at AFS: "The combination of HFS's standing and AFS's structuring expertise with primary and secondary market coverage, makes it possible to create a range of products and services for investors and real estate companies that is unparalleled." Johannes Märklin, also Managing Partner at AFS, adds: "Especially now as traditional banks are significantly restricting their credit exposures, combining our very complementary businesses in AFS and HFS opens up outstanding organic growth opportunities and the possibility to secure and enhance our substantial market share in the dynamic private debt sector at an early stage."

AFS was founded by Sebastian Ernst and Johannes Märklin in 2018 and has grown rapidly ever since, having enabled more than € 3bn of financings on behalf of real estate clients. The focus lies on financing solutions for acquisitions, developments, constructions and standing properties. AFS generates additional income through corresponding primary market issuances and associated secondary market trading. This acquired platform will offer a wide range of synergetic effects. It completes Corestate's offering of debt financings, mainly mezzanine, and substantially expands the client base. AFS has a team of more than 20 highly specialised employees and a licence under Section 32 of the German Banking Act for the issuing, proprietary trading and placement of financial instruments.

AFS on a stand-alone basis expects to generate between € 25m to € 30m revenues and between € 15m to € 20m EBITDA for 2021 based on a detailed pipeline of transactions already in progress. In addition, Corestate expects synergies in revenues and costs of at least € 10m annually on a run rate basis within the next three years.

The acquisition is conducted via a capital increase against contribution-in-kind by issuance of 8.5m new shares and € 5m in cash consideration. Based on the closing price as of 14 January 2021 of € 14.73 and with respect to the € 17m net cash position based on the preliminary closing of 2020 accounts the net purchase price is € 113m. This corresponds to a substantial discount to the fundamental value of AFS being in excess of € 170m. Another 1.5m new shares are to be paid as earn-out if the pre-synergy EBITDA increases by more than 50% over the next three years. In both cases, the acquisition of AFS will be earnings accretive. Closing of the transaction is anticipated in the second quarter of 2021, following approval by the responsible supervisory authorities.

Both Sebastian Ernst and Johannes Märklin have entered into a long-term lock-up agreement for their shares in Corestate demonstrating their firm commitment towards the group and all stakeholders.

As it has in recent months, Corestate will continue to pursue its strategy of decreasing net financial debt based on a structured placement process of balance sheet assets. Accordingly, the clear ambition to reduce the financial leverage ratio (the ratio of net financial liabilities to EBITDA) to between 2x and 3x by the end of 2021 remains unchanged.

J.P. Morgan acts as exclusive financial advisor, and White & Case as legal advisor in the transaction.

Press contact
Jorge Person
T: +49 69 3535630-136 / M: +49 162 2632369
jorge.person@corestate-capital.com

Investor relations contact
Mario Groß
T: +49 69 3535630-106 / M: +49 162 1036025
ir@corestate-capital.com

About CORESTATE Capital Holding S.A.

CORESTATE Capital Holding S.A. (CORESTATE) is an investment manager and co-investor with more than € 28 bn in assets under management. As a fully integrated real estate platform, CORESTATE offers its customers combined expertise in the areas of investment and fund management as well as property management services. The company operates as a respected business partner of institutional clients and wealthy private investors internationally. CORESTATE is headquartered in Luxembourg and has 42 additional offices in Frankfurt, London, Paris, Madrid, Zurich and Amsterdam, among others. The company employs around 800 people and is listed in the Prime Standard (SDAX) of the Frankfurt Stock Exchange. Please visit www.corestate-capital.com for further information.

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