– Combined Company Expected to Own and Manage Over 30,000 Homes –
– Stock-For-Stock Transaction Based on Net Asset Value –
– Combined Asset Value of $7.7 Billion at Closing –
– Agreement Includes Internalization of SWAY Manager –
– Expected to Achieve $40 – $50 Million in Synergies –
– Transaction Expected to be Accretive to SWAY Core FFO/Share –
– Both Companies to Host Joint Webcast Today –
OAKLAND, Calif. & SCOTTSDALE, Ariz.–Starwood Waypoint Residential Trust (NYSE:SWAY) and Colony American Homes (“CAH”) announced today the signing of a definitive merger agreement (“Agreement”) to combine the two companies in a stock-for-stock transaction. In connection with the transaction, SWAY will internalize the SWAY manager. The combined internally managed company (“the Company”) is expected to own and manage over 30,000 homes and have an aggregate asset value of $7.7 billion at the closing of the transaction. The merger is expected to achieve estimated annualized cost synergies of $40 – $50 million.
Under the Agreement, the CAH shareholders will receive an aggregate of 64,869,583 SWAY shares in exchange for all shares of CAH. Upon completion of the transaction, existing SWAY shareholders and the former owner of the SWAY manager will own approximately 41% of the Company’s shares combined, while former CAH shareholders will own approximately 59% of the Company’s shares. The share allocation was determined based on each company’s net asset value and is not subject to adjustment. The Company’s shares will continue to trade on the New York Stock Exchange. The Company is expected to maintain SWAY’s quarterly dividend of $0.19 per share. The transaction has been approved by the boards of both SWAY and CAH, and the terms of the internalization of the SWAY manager were negotiated and approved by a special committee of the board of trustees of SWAY. The transaction is expected to close in the first quarter 2016. Among other things, the transaction is subject to approval of SWAY shareholders and customary closing conditions.
Barry Sternlicht, Chief Executive Officer (“CEO”) and Chairman of Starwood Capital Group, and Thomas J. Barrack, Jr., Executive Chairman of Colony Capital, Inc., will serve as non-executive Co-Chairmen of the Company’s Board of Trustees. Fred Tuomi, President and Chief Operating Officer (“COO”) of CAH, will serve as CEO. Doug Brien, CEO of SWAY, will serve as President and COO. Arik Prawer, Chief Financial Officer (“CFO”) of CAH, will serve as CFO. The Company’s corporate and operational headquarters will be in Scottsdale, Arizona, while maintaining a significant presence in Oakland, California.
“This merger is a transformative event for SWAY and for our industry,” stated Barry Sternlicht. “Combining two best-in-class teams, with a superior portfolio of homes in carefully selected geographic markets, positions us to deliver long-term capital appreciation for our shareholders while earning compelling current yields at or above those currently achievable in other major real estate asset classes.”
Added Thomas J. Barrack, Jr., “We believe this merger demonstrates the power of scale and consolidation and really crystallizes the long-term durability of the single-family rental industry; this combination of CAH and SWAY truly redefines this asset class, and the opportunity in front of us is immense.”
SWAY was advised by Moelis & Company and Sidley Austin LLP. CAH was advised by Morgan Stanley & Co. LLC, Skadden, Arps, Slate, Meagher & Flom LLP and Clifford Chance US LLP. The Special Committee of the Board of Trustees of SWAY was advised by Wells Fargo Securities and Wachtell, Lipton, Rosen & Katz.
Webcast and Conference Call Information
An investor presentation about the merger will be available in the investor relations section of SWAY’s website at www.starwoodwaypoint.com. SWAY and CAH will hold a conference call today at 9:00 Eastern to discuss the transaction. Participants will include Barry Sternlicht and Thomas J. Barrack, Jr. A webcast link will be available on the investor relations section of SWAY’s website. To participate in the telephone conference call, dial in at least ten minutes prior to start time. The domestic dial-in number is 1-888-430-8691 (for U.S. and Canada) and the international dial-in number is 1-719-325-2491 (passcode not required). A replay of the call will be available through September 28, 2015 and can be accessed by calling 1-877-870-5176 (U.S. or Canada) or 1-858-384-5517 (international). The passcode for the replay is 832901.
About Starwood Waypoint Residential Trust
Starwood Waypoint Residential Trust (NYSE: SWAY) is one of the largest publicly traded owners and operators of single-family rental homes in the United States. As of June 30, 2015, SWAY owned approximately 12,500 homes in eight U.S. states. Partnered with Starwood Capital Group, a leading private investment firm with a core focus on global real estate, Starwood Waypoint Residential Trust acquires, renovates, leases, maintains and manages single-family homes in markets that exhibit favorable demographics and long-term economic trends, as well as strengthening demand for rental properties. The company also invests in non-performing loans, and works with interested and qualified borrowers to find solutions to keep them in their homes. Starwood Waypoint Residential Trust is Reinventing Renting™ by building its business upon a foundation of respect for its residents and the communities in which it operates. Additional information can be found at www.starwoodwaypoint.com.
About Colony American Homes
Colony American Homes, Inc. is a market leader in the acquisition, ownership, renovation, leasing and management of single-family residential homes in the United States. As of June 30, 2015, CAH owned and managed approximately 19,000 homes, representing one of the largest portfolios of single-family homes in the United States. CAH was formed in 2012 by Colony Capital, Inc., a leading global real estate and investment management firm. Additional information can be found at www.colonyamerican.com.
About Starwood Capital Group
Starwood Capital Group is a private investment firm with a primary focus on global real estate. Since its inception in 1991, the Firm has raised over $31 billion of equity capital and currently has more than $44 billion of assets under management. Over the past 24 years, Starwood Capital has acquired approximately $65 billion of assets across virtually every real estate asset class.
About Colony Capital, Inc.
Colony Capital, Inc. (NYSE: CLNY) is a leading global real estate and investment management firm headquartered in Los Angeles, California with 14 offices in 10 countries and more than 300 employees. Prior to its combination with Colony Financial, Inc. in 2015, Colony Capital, LLC sponsored $25 billion of equity across a variety of distinct funds and investment vehicles that collectively invested over $63 billion of total capital. CLNY targets attractive risk-adjusted investment returns and its portfolio is primarily composed of: (i) general partner interests in CLNY sponsored private equity funds and vehicles; (ii) real estate equity; and (iii) real estate and real estate-related debt. CLNY has elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes.