USD 600 M DEAL - Forestar Group Inc. to Be Acquired by Starwood Capital Group
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Forestar Group Inc. to Be Acquired by Starwood Capital Group
Business Wire
AUSTIN, Texas -- April 13, 2017
Forestar Group Inc. (“Forestar†or the “Companyâ€) (NYSE: FOR) today announced that it has entered into a definitive merger agreement (the “Merger Agreementâ€) with affiliates of Starwood Capital Group (“Starwoodâ€) under which Starwood will acquire all of the outstanding shares of common stock of the Company for $14.25 per share in cash. The total transaction equity value is approximately $605 million.
The transaction price of $14.25 per share represents an 8.2% premium to the 90-day volume weighted average price of common stock of the Company.
“Over the past 18 months Forestar has significantly reduced costs and outstanding debt, exited non-core assets and focused on its core community development business. While executing these key initiatives, the Board and management have been evaluating longer term strategic alternatives,†said James A. Rubright, Chairman of the Board. “After conducting a thorough review assisted by highly experienced financial and legal advisors, the Board believes that engaging in the transaction with Starwood is the best option to maximize stockholder value.â€
The Board of Directors of the Company has unanimously approved the merger agreement and has recommended approval of the merger by Forestar’s stockholders. The transaction is expected to close in the third quarter of 2017 and is contingent on the approval of Forestar’s stockholders, and is subject to the satisfaction or waiver of certain other closing conditions. The transaction is not subject to a financing condition.
JMP Securities LLC is acting as financial advisor to the Company, with Skadden, Arps, Slate, Meagher & Flom LLP acting as legal advisor. Kirkland & Ellis LLP is acting as legal advisor to Starwood.
First Quarter 2017 Financial Results
In light of today's announcement, the Company will not issue an earnings release for its first quarter 2017 or hold a conference call for analysts and investors to discuss its first quarter 2017 financial results.
About Forestar Group
Forestar is a residential and mixed-use real estate development company. At year-end 2016, we own directly or through ventures interests in 50 residential and mixed-use projects comprised of approximately 4,600 acres of real estate located in 10 states and 14 markets. In addition, we own interests in various other assets that have been identified as non-core that the company is divesting opportunistically over time. At year-end 2016, our remaining non-core assets principally include over 523,000 net acres of owned mineral assets principally located in Texas, Louisiana, Georgia and Alabama, 19,000 acres of timberland and undeveloped land (including mitigation banking), four multifamily assets and approximately 20,000 acres of groundwater leases in central Texas. On February 17, 2017, we sold our owned mineral assets for $85.6 million. Forestar operates in three business segments: real estate, mineral resources and other. Forestar’s address on the World Wide Web iswww.forestargroup.com.
About Starwood Capital Group
Starwood Capital Group is a private alternative investment firm with a core focus on global real estate, energy infrastructure and oil & gas. The Firm and its affiliates maintain 10 offices in four countries around the world, and currently have more than 2,200 employees. Starwood Capital Group has raised over $40 billion of equity capital since its inception in 1991, and currently manages more than $51 billion in assets. The Firm has invested in virtually every category of real estate on a global basis, opportunistically shifting asset classes, geographies and positions in the capital stack as it perceives risk/reward dynamics to be evolving. Over the past 26 years, Starwood Capital Group and its affiliates have successfully executed an investment strategy that involves building enterprises in both the private and public markets. Additional information can be found at starwoodcapital.com.