Colony Financial, Colony Capital to Combine in USD 675m Deal.
23 December 2014 - US-based real estate investment and finance company Colony Financial, Inc. (NYSE: CLNY) has inked a USD 675m deal to combine with the parent company of its manager, Colony Capital, LLC.
The two companies said they have signed a definitive agreement for the contribution to CLNY of substantially all of Colony Capital's real estate and investment management businesses and operations for an aggregate potential consideration of up to USD 657.5m to be paid in a combination of shares of CLNY common stock and membership interests in a subsidiary of CLNY that will hold CLNY's business and operations, and otherwise on terms consistent with the non-binding agreement in principle jointly announced by the parties on November 4, 2014.
According to Colony Financial, the number of shares and membership interests to be issued in the proposed transaction is based on a per share price of USD 22.05 per share or membership unit, which the company said is based on a fair value per CLNY common share on September 30, 2014.
The aggregate potential consideration of USD 657.5m consists of fixed upfront consideration equal to approximately USD 547.5m and contingent consideration of up to approximately USD 110m, subject to multi-year performance targets for achievement of certain adjusted funds from operations per share targets and capital-raising thresholds from the funds management businesses.
If the minimum performance target for either of these metrics is not met or exceeded, the contingent consideration paid in respect of the other metric would not be paid out in full, it said.
Colony Capital is a privately held independent global real estate investment firm and registered investment advisor headquartered in Los Angeles, California and founded in 1991 by Thomas J. Barrack, Jr.
Sector: Construction/Real Estate
Target: Colony Financial
Buyer: Colony Capital
Deal size in USD: 675m
Financing: Cash and Stock
Buyer advisor: , ,