NorthStar Asset Management Group, Colony Capital, and NorthStar Realty Finance have announced that they have entered into a definitive merger agreement under which the companies will combine in an all-stock merger of equals transaction to create a real estate and investment management platform.
The combined company will be named “Colony NorthStar, Inc.” The transaction is expected to close during the first quarter of 2017, subject to customary closing conditions, including regulatory approvals, and approval by the NSAM, Colony and NRF shareholders.
Upon completion of the transaction, NSAM shareholders will own approximately 32.85%, Colony shareholders will own approximately 33.25% and NRF shareholders will own approximately 33.90% of the combined company on a fully diluted basis. NSAM shareholders will also receive, in addition to its regular quarterly dividend, a special cash dividend equal to $128 million, which represents a one-time distribution of excess NSAM taxable earnings and profits.
Upon closing of the transaction, Thomas J. Barrack Jr. will be Executive Chairman of the Board of Directors of Colony NorthStar, David Hamamoto will be Executive Vice Chairman, and Richard B. Saltzman will be Chief Executive Officer.
The transaction creates a global, diversified equity REIT with $58 billion of assets under management, led by a seasoned management team with access to proprietary deal sourcing and a significant track record as a global investor, operator and asset manager.
The portfolio has a concentration in scaled verticals across geographies, property types and capital stack positions, consisting primarily of owned real estate.
The companies have estimated an approximately $115 million in total annual cost synergies, consisting of approximately $80 million of cash savings and approximately $35 million of stock based compensation savings, expected to be realized post-closing.