American Residential Properties and American Homes 4 Rent have signed a a definitive agreement to combine the two companies in a tax-free merger at a total transaction value of approximately $1.5 billion.
The merger also states that 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.
"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," said David Singelyn, Chief Executive Officer of American Homes 4 Rent. "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."
With the merger, the combined company is projected to own more than 47,000 homes in 22 states, and to have an equity market capitalization of $5.5 billion, as well as a combined real estate cost basis of over $8 billion.
"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," said American Residential Properties Chairman and Chief Executive Officer, Stephen G. Schmitz. "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."
Visit their press release posted at Business Wire for more information regarding the merger agreement of the two companies.
