OAKLAND, CA - Starwood Waypoint Residential Trust and Colony American Homes announced the signing of a definitive merger 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 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.
“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.”
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 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 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.”