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Starwood accepts Invitation’s offer
Posted on Thursday, 10 August 2017 13:39
Blackstone’s Invitation Homes is acquiring Starwood Waypoint to create a single-family rental housing operator with an equity market capitalisation of USD 11.00 billion and a total enterprise value of USD 20.00 billion.
The two listed companies have overlapping portfolios with nearly identical average monthly rents and almost 70.0 per cent of combined revenues coming from the western US and Florida.
With an average of 4,800 homes per market, the enlarged entity had pro forma same-store net operating income growth of 7.0 per cent in the second quarter of 2017 with over 95.0 per cent occupancy.
The all-scrip deal comprises the conversion of one Starwood share into 1.61 stocks of the Texan single-family rental home owner, resulting in a 59.0 per cent and 41.0 per cent, respectively, and will operate under the name Invitation.
It should add to core funds from operations and adjusted funds from operations on a run-rate basis and reduce Blackstone’s currently 70.0 per cent ownership stake to 41.0 per cent of the enlarged group.
As of 30th June 2017, on a pro forma basis, it would have 44.0 per cent debt to enterprise value and should have liquidity of USD 1.30 billion available through revolving lines of credit and unrestricted cash.
Invitation was formed to own, renovate, lease and operate single-family residential properties and went public in February 2017 via an initial public offering worth USD 1.54 billion.
On the other hand, Starwood was created through the takeover of Colony American Homes by Starwood Waypoint Residential Trust at the beginning of last year.
The residential property manager was worth USD 4.31 billion in the markets yesterday after stocks closed at USD 33.62 while Invitation had a market capitalisation of USD 6.51 billion.
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