Combined Company Anticipated To Have and Handle Over 30,000 Single-Family Rental Residences
2 of the pioneers in business of building up distressed-priced single-family homes in the aftermath of the Great Economic crisis plan to merge now that the real estate market has nearly recovered. Starwood Waypoint Residential Trust and Colony American Homes today signed a definitive merger agreement to incorporate the two business in a stock-for-stock deal.
In connection with the deal, Starwood Waypoint will internalize its manager. The combined internally managed business is anticipated to possess and manage more than 30,000 single-family houses and have an aggregate asset value of $7.7 billion at the closing of the transaction.
Since June 30, 2015, Starwood Residential owned around 12,500 houses in eight U.S. states, while Colony American owned and handled roughly 19,000 homes,
Under the agreement, Nest American shareholders will certainly get an aggregate of 64.9 million Starwood Residential shares in exchange for all shares of Colony American. Valued at $22.75/ share prior to today’s stock exchange opening, the merger has a value of about $1.48 billion.
Upon conclusion of the deal, existing Starwood Residential investors and the previous owner of the Starwood Residential manager will certainly own roughly 41 % of the combined business’s shares. Former Nest American shareholders will certainly own approximately 59 % of the business’s shares.
Fred Tuomi, president and COO of Colony American, will certainly work as CEO. Doug Brien, CEO of Starwood Residential, will act as president and COO. Arik Prawer, CFO of Nest American, will certainly serve as CFO.
The combined business’s corporate and operational headquarters will be in Scottsdale, Arizona, while maintaining a substantial presence in Oakland, CA.
Barry Sternlicht, CEO and chairman of Starwood Capital Group, and Thomas J. Barrack, Jr., executive chairman of Colony Capital Inc., will work as non-executive co-chairmen of the combined company’s board.
“This merger is a transformative occasion for Starwood Residential and for our market,” stated Sternlicht. “Integrating 2 best-in-class groups, with a superior portfolio of houses in carefully selected geographical markets, positions us to provide long-lasting capital gratitude for our investors while earning compelling current yields at or above those currently attainable in other major realty possession classes.”
“Our team believe this merger shows the power of scale and consolidation and truly takes shape the long-lasting toughness of the single-family leasing market,” included Barrack. “This mix of Colony American and Starwood Residential genuinely redefines this asset class, and the chance in front of us is immense.”
The merger is anticipated to accomplish estimated annualized cost synergies of $40 million to $50 million.
The deal has been approved by the boards of both Starwood Residential and Colony American, and the terms of the internalization of the Starwood Residential supervisor were negotiated and accepted by a special committee of the board of trustees of Starwood Residential.
The deal is expected to enclose the first quarter 2016. Among other things, the transaction is subject to approval of Starwood Residential shareholders and customary closing conditions.