The finance services business said the deal involves an upfront payment of $63.69 million as well as the issuance of 23.89 million new Allco ordinary shares and 5.83 million convertible shares.
Allco already has a 20.4 per cent stake in Rubicon, which specialises in asset origination and the creation, syndication and management of specialist real estate funds.
The transaction, which is expected to be finalised by the end of 2007, is earnings per share accretive for Allco on a pro-forma basis for the 2007 financial year, before amortisation of intangibles on acquisition and excluding synergies.
Allco said the acquisition will add "significant additional revenue opportunities" for the combined business and ramp up its real estate business.
Allco managing director and chief executive David Clarke said the Allco aims to become a leading global manager in a number of core asset classes, including real estate.
"Rubicon has experienced strong growth in assets under management, revenue and profit since its establishment in 2001," Mr Clarke said.
"This acquisition will significantly enhance Allcos asset origination and funds management capabilities in the real estate sector, one of Allco's core asset classes, and provide access to a broader range of growth opportunities."
If given approval, Allco's real estate division and Rubicon will be merged and operate under the newly created Allco Rubicon name.
"The Allco board believes the two businesses are highly complementary," Mr Clarke said.
"If the transaction is approved, we expect the two real estate businesses to be fully merged and integrated by the end of the first quarter in 2008."
The merger would mean Allco would have $9.1 billion worth of property under management, located in Australia, Singapore, Tokyo, London, Chicago and Omaha.
Dr Gordon Fell, the chairman and managing director of Rubicon, will become the executive chairman of the combined Allco Rubicon real estate division and will enter into a three-year employment agreement with Allco.
Dr Fell will remain a director of Allco.
Sydney-based Rubicon is focused on international real estate and currently owns or manages assets in countries such as the United States, Europe and Japan, employing 44 people and with assets under management worth $5.6 billion.
This includes $5.2 billion in international real estate held mainly through three real estate trusts on the Australian Securities Exchange.
Shareholders of Rubicon include Gardener's Arms Pty Ltd (44.9 per cent), Allco (20.4 per cent) Monetti Pty Ltd, (19.9 per cent) and Otaki Capital Pty Ltd (14.8 per cent).
The entities are those which Gordon Fell, David Coe and Matthew Cooper hold their interests in Rubicon.
Allco's shares were up 18 cents to $8.60 at 1036 AEST Tuesday.
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source: theage.com.au
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