Greystar Real Estate Partners to Acquire Student Housing Giant EdR in $4.6 Billion Transaction

Greystar Real Estate Partners to Acquire Student Housing Giant EdR in $4.6 Billion Transaction

MEMPHIS, TN - EdR, one of the nation's largest developers, owners and managers of high-quality collegiate housing communities, announced that it has entered into a definitive merger agreement to be acquired by a newly-formed, perpetual-life fund, Greystar Student Housing Growth and Income Fund, LP ("GEdR"), an affiliate of Greystar Real Estate Partners, in an all-cash transaction valued at approximately $4.6 billion, including debt to be assumed or refinanced. 

Under the terms of the merger agreement, which was unanimously approved by EdR's Board of Directors, EdR's stockholders will receive $41.50 per share in cash. This represents a premium of 26.3 percent over the 90-day volume-weighted average share price ending May 31, 2018 and a premium of 13.6 percent over the May 31, 2018 closing share price, the last trading day prior to news stories speculating about the possible sale of EdR. 

"For more than 50 years, EdR has been a pioneer in the student housing industry, partnering with some of America's most prestigious universities to enhance and transform their campus housing and achieve their student success goals," said Randy Churchey, EdR's Chief Executive Officer and Chairman of the Board of Directors. "As a public company, one of our priorities is to maximize stockholder value and we believe this transaction with Greystar accomplishes that goal. We are certain today's announcement is in the best interest of all of EdR's stakeholders, including university partners, employees and stockholders."

Churchey added, "Since the current EdR management team took over on January 1, 2010 -- and including this transaction -- EdR stockholders will have received a total stockholder return of 293%1, which ranks in the top quartile of all public U.S. equity REITs in existence during that time period2."

"We are pleased to partner with a group of world-class investors to acquire one of the nation's best student housing operators and developers. EdR has one of the highest quality and best located student housing portfolios in the U.S., and it will seed Greystar's newly formed flagship student housing-focused perpetual-life fund. We are excited to capitalize on our significant scale and experience to enhance the platform's performance and value over the long term," said Bob Faith, the Founder, Chairman and Chief Executive Officer of Greystar. "EdR's ONE Plan on-campus platform is an integral component that drove our interest and we are excited about the continued on-campus growth opportunities it provides. Combined, we will leverage our expertise, vision and financial strength to serve our current university partners as well as further expand our global student housing footprint. We believe in the long-term fundamentals supporting the sector and will continue to seek out opportunities to invest in student housing." 

The transaction, which is currently expected to close in the second half of 2018, is subject to customary closing conditions, including the approval of EdR's stockholders, who will vote on the transaction at a special meeting on a date to be announced. The transaction is not contingent on receipt of financing by Greystar. 

In conjunction with the above transaction and subject to normal closing conditions, a joint venture between an affiliate of Blackstone Real Estate Income Trust, Inc. ("BREIT") and an affiliate of Greystar will acquire a portfolio of off-campus student housing assets, which are located adjacent to top-tier university campuses. The newly combined Greystar/EdR team will continue to manage the assets.   BREIT is a perpetual-life, monthly NAV REIT that, pro forma for this transaction, will own an approximately $10 billion portfolio of stabilized, income generating real estate concentrated in U.S. markets with attractive growth as well as real estate debt securities. 

Under the Merger Agreement, EdR will discontinue its regular quarterly dividends. However, if the transaction is completed after October 15, 2018, EdR stockholders will receive a per diem amount of approximately $0.00435 per share for each day from October 15, 2018 until (but not including) the closing date.  

BofA Merrill Lynch is serving as exclusive financial advisor, and Morrison & Foerster LLP and Venable LLP are serving as legal advisors to EdR. J.P. Morgan Securities LLC is serving as exclusive financial advisor, and Hogan Lovells US LLP and King & Spalding are serving as legal advisors, to Greystar. 

JPMorgan Chase Bank, N.A. has provided a commitment letter to Greystar's newly formed fund for debt financing for the transaction upon the terms and conditions set forth in such letter. 

Citigroup Global Markets Inc. and TSB Capital Advisors are acting as financial advisors to BREIT, and Simpson Thacher & Bartlett LLP is acting as legal advisor to BREIT.

Source: Greystar / #Apartments #Multifamily

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