USD 1.5 BN DEAL - American Homes 4 Rent and American Residential Properties, Inc. to Merge, Enhancing the Size of the Largest Publicly-Traded Single-Family Rental Company
American Homes 4 Rent and American Residential Properties, Inc. to Merge, Enhancing the Size of the Largest Publicly-Traded Single-Family Rental Company
- Combined Company Expected to Own and Manage More Than 47,000 Homes -
- Combined Real Estate Cost Basis of Over $8 Billion at Closing –
- Expected to Achieve Corporate and Operating Synergies -
- Transaction Expected to be Accretive to AMH Core FFO / Share -
- Companies to Host Joint Webcast Today –
Business Wire
AGOURA HILLS, Calif. & SCOTTSDALE, Ariz. -- December 3, 2015
American Homes 4 Rent (NYSE:AMH) and American Residential Properties, Inc. (NYSE:ARPI) announced today that the Boards of both companies have approved a definitive agreement to combine the two companies in a tax-free merger at a total transaction value of approximately $1.5 billion. In the merger, American Homes 4 Rent will issue approximately 38 million common shares and assume or repay a total of approximately $0.8 billion of American Residential Properties debt. The merger is targeted to close during the first half of 2016.
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David Singelyn, Chief Executive Officer of American Homes 4 Rent, stated, “We are delighted to announce our agreement to combine with American Residential Properties, further establishing American Homes 4 Rent as the largest publicly-traded owner and operator of single family rental homes. American Residential Properties has a high quality portfolio of homes which fit strategically in our markets, offering significant opportunities to capture further operating efficiencies on the combined platform. Moving ahead, we look forward to creating additional value for the shareholders of the combined company while strengthening our position as a premier company in the single-family rental sector.”
American Residential Properties Chairman and Chief Executive Officer Stephen G. Schmitz commented, “We are excited to join forces with one of the largest and most successful single family residential companies in our growing industry. Over the past year, our management and Board have explored many options to enhance returns to our stockholders and we believe this strategic transaction is the best way to deliver long-term value to our stockholders. This merger provides American Residential Properties stockholders with a premium for their shares and the opportunity to benefit from participation in the upside potential of an efficient, larger platform that is well positioned in high growth markets and that will benefit from operating synergies.”
Under the merger agreement, at closing, each share of American Residential Properties common stock and each limited partnership unit in its operating partnership will be exchanged for 1.135 common shares or limited partnership units of American Homes 4 Rent, representing a current value per share/unit of American Residential Properties of $19.01 based on American Homes 4 Rent closing price on December 2, 2015, a 19.8% premium over the volume weighted average closing price of American Residential Properties common stock over the 20 trading days ending on December 2, 2015, and an 8.7% premium over American Residential Properties’ closing price on December 2, 2015. The exchange ratio is not subject to adjustment. Upon closing, American Residential Properties stock and unit holders will own approximately 12.6% of the outstanding common shares and units of the combined company. One of the current American Residential Properties directors to be designated before the closing will join the board of American Homes 4 Rent.
The merger will enhance the size of the largest publicly-traded single-family rental company. The combined company is expected to own more than 47,000 homes in 22 states and to have an equity market capitalization of $5.5 billion (based on American Homes 4 Rent’s closing price on December 2, 2015) and an aggregate real estate cost basis of over $8 billion. Given the geographic overlap of American Homes 4 Rent and American Residential Properties portfolios, operational synergies are expected to be achieved by reducing duplicate expenses for internet charges, supervisory property management personnel, management information systems and other back-office functions. The merger is expected to be accretive to American Homes 4 Rent Core FFO.
American Homes 4 Rent will retain its corporate headquarters in Agoura Hills, California, while maintaining a presence in the Phoenix, Arizona market. American Residential Properties’ Chairman and Chief Executive Officer, Stephen G. Schmitz, and its President and Chief Operating Officer, Laurie Hawkes, will remain with the company until the closing of the merger.
The merger is subject to majority approval of American Residential Properties stockholders and to customary closing conditions. Mr. Schmitz and Ms. Hawkes have agreed to vote their shares in favor of the merger.
Barclays is serving as lead financial advisor to American Residential Properties with Raymond James also servicing as financial advisor, and Hunton & Williams LLP is serving as its legal counsel. Hogan Lovells US LLP is serving as legal counsel to American Homes 4 Rent.
Webcast and Conference Call Information
An investor presentation about the merger will be available in the investor relations section of American Homes 4 Rent’s website atwww.americanhomes4rent.com and of American Residential Properties atwww.amresprop.com. American Homes 4 Rent and American Residential Properties will hold a conference call today at 8:30 a.m. Eastern Time to discuss the merger. A website link will be available on the investor relations section of American Homes 4 Rent and American Residential Properties.
The domestic dial-in number is (877) 705-6003 (for U.S. and Canada) and the international dial-in number is (201) 493-6725 (passcode not required). A simultaneous audio webcast may be accessed by using the links in the investor relations section at www.americanhomes4rent.com and www.amresprop.com. A replay of the audio webcast may be accessed through December 17, 2015, by calling (877) 870-5176 (U.S. and Canada) or (858) 384-5517 (international), replay passcode number 13626469, or by using the links in the investor relation sections at www.americanhomes4rent.com and www.amresprop.com.
About American Homes 4 Rent
American Homes 4 Rent (NYSE: AMH) is a leader in the single-family home rental industry and “American Homes 4 Rent” is fast becoming a nationally recognized brand for rental homes, known for high quality, good value and tenant satisfaction. American Homes 4 Rent an internally managed Maryland real estate investment trust, or REIT, focused on acquiring, renovating, leasing and operating attractive, single-family homes as rental properties. As of September 30, 2015, American Homes 4 Rent owned 38,377 single-family properties in selected submarkets in 22 states.
About American Residential Properties
American Residential Properties, Inc. is an internally managed real estate company, organized as a REIT for federal income tax purposes that acquires, owns, and manages single-family homes as rental properties in select communities nationwide. American Residential Properties, Inc.’s primary business strategy is to acquire, restore, lease and manage single-family homes as well-maintained investment properties to generate attractive, risk-adjusted returns over the long-term. As of September 30, 2015, American Residential Properties, Inc. owned 8,938 single-family properties in selected submarkets in 12 states.