- Merger of equals will create leading single-family rental portfolio
and platform
- Combined company will have 82,000 homes and average of 4,800 homes
per market
- Portfolio focused on strategically targeted, high-growth markets,
with nearly 70 percent of revenue coming from the Western US and
Florida
- Substantial portfolio overlap expected to drive $45-50 million in
annual synergies
- Invitation Homes’ Bryce Blair to Remain Chairman, Starwood Waypoint
Homes’ Fred Tuomi to be CEO
- Continued strong performance with combined company experiencing 7
percent pro forma same- store NOI growth in Q2 2017 with over 95
percent occupancy
DALLAS & SCOTTSDALE, Ariz.--(BUSINESS WIRE)--
Invitation Homes (NYSE: INVH) and Starwood Waypoint Homes (NYSE: SFR),
two leading owners and operators of single-family rental homes in the
United States, announced today the signing of a definitive agreement to
combine in a 100 percent stock-for-stock merger-of-equals transaction.
The combined company, which will operate under the name “Invitation
Homes,” will bring together the best practices, technology, and
personnel from both firms to create the premier single-family rental
company in the United States. The combination of these two industry
innovators will produce a company with an unparalleled ability to
deliver enhanced service offerings to residents more efficiently,
continue investing in local communities, and generate substantial value
for stockholders.
Under the terms of the agreement, each Starwood Waypoint Homes share
will be converted into 1.614 Invitation Homes shares, based on a fixed
exchange ratio. The all-stock merger is intended to be a tax-free
transaction. Upon the closing of the transaction, Invitation Homes
stockholders will own approximately 59 percent of the combined company’s
stock, while Starwood Waypoint Homes stockholders will own approximately
41 percent of the combined company’s stock. Based on the closing prices
of Starwood Waypoint Homes common shares and Invitation Homes common
stock on August 9, 2017, the equity market capitalization of the
combined company would be approximately $11 billion and the total
enterprise value (including debt) would be approximately $20 billion.
The combined company’s shares are expected to continue trading on the
New York Stock Exchange under the ticker symbol for Invitation Homes
(NYSE: INVH).
This strategic transaction combines two companies with highly
complementary capabilities, including Invitation Homes’ industry-leading
approach to customer service and asset-management expertise, and
Starwood Waypoint Homes’ industry-leading technology. In addition, the
current Starwood Waypoint Homes CEO Fred Tuomi, who will become CEO of
the combined company, has experience successfully integrating mergers of
large-scale, single-family rental companies. Overall, the two companies
have invested nearly $2 billion, an average of approximately $22,000 per
home, in renovations and maintenance, improving resident experience and
driving economic growth and job creation in local communities.
The combined company would own and manage an irreplaceable portfolio of
approximately 82,000 single-family homes. While the combined company
would be the largest single-family rental company in the United States,
its portfolio still represents less than 0.1 percent of the more than 90
million single-family homes in the United States, and just 0.5 percent
of the nearly 16 million single-family homes for rent in the United
States.
The two companies have very similar portfolios of homes focused on
overlapping, strategically selected, high-growth markets – with nearly
identical average monthly rents and nearly 70 percent of combined
company revenues coming from the Western US and Florida. The combined
portfolio would also have an average of 4,800 homes per market, allowing
it to leverage economies of scale and improve operating efficiency,
while also enhancing customer service. The combined company experienced
pro forma same-store net operating income (NOI) growth of 7.0 percent in
2Q 2017 with over 95 percent occupancy.
“This merger creates the leading single-family rental company in the
United States, which will be uniquely positioned to deliver exceptional
service to residents, while also improving operating efficiency. That is
a win-win for both residents and stockholders,” said Fred Tuomi, Chief
Executive Officer of Starwood Waypoint Homes. “We will have an
irreplaceable portfolio of homes focused in select high-growth markets,
offering unrivaled service and high-quality housing options for families
choosing to rent. We have great admiration for Invitation Homes and its
talented team, and look forward to embarking on an exciting new chapter
together.”
“By joining forces, the combined company will be in an even stronger
position to serve residents and investors,” said John Bartling,
President and CEO of Invitation Homes. “By bringing together these two
world-class organizations, Invitation Homes will continue building on
its industry-leading operational capabilities and resident-centric
approach – while also providing enhanced liquidity to stockholders.”
Management, Governance and Corporate Headquarters
Upon completion of the transaction, Fred Tuomi, Chief Executive Officer
of Starwood Waypoint Homes, will become CEO of Invitation Homes; Ernie
Freedman, Chief Financial Officer of Invitation Homes, will remain CFO;
Charles Young, Chief Operating Officer of Starwood Waypoint Homes, will
become COO; and Dallas Tanner, Chief Investment Officer of Invitation
Homes, will remain CIO. The combined company will be headquartered in
Dallas, Texas, and will maintain a presence in Scottsdale, Arizona. The
combined Board is expected to have 11 directors, consisting of six
directors appointed by Invitation Homes and five directors appointed by
Starwood Waypoint Homes:
-
Chairman, Bryce Blair, Current Invitation Homes Chairman
- Fred Tuomi, Current Starwood Waypoint Homes Board Member, Starwood
Waypoint Homes CEO
- Richard D. Bronson, Current Starwood Waypoint Homes Board Member
- Michael D. Fascitelli, Current Starwood Waypoint Homes Board Member
- Jonathan D. Gray, Current Invitation Homes Board Member
- Robert G. Harper, Current Invitation Homes Board Member
- Jeffrey E. Kelter, Current Starwood Waypoint Homes Board Member
- John B. Rhea, Current Invitation Homes Board Member
- Janice L. Sears, Current Invitation Homes Board Member
- William J. Stein, Current Invitation Homes Board Member
- Barry S. Sternlicht, Current Starwood Waypoint Homes Board Member,
Chairman & Chief Executive Officer of Starwood Capital Group
Financial Highlights
The combined company is expected to generate projected annual run-rate
cost synergies of $45-50 million, with potential additional upside from
the implementation of best practices to optimize revenue management and
operating efficiency. The transaction is expected to be accretive to
core FFO and AFFO on a run-rate basis. The combined company is also
expected to benefit from a flexible balance sheet with lower long-term
cost of capital and a continued path towards deleveraging. The
transaction will also significantly increase the free float of
Invitation Homes’ shares and reduce Blackstone’s ownership stake in the
combined company to 41 percent from 70 percent in the current,
stand-alone Invitation Homes. The quarterly dividend is expected to be
$0.11 per share post-close.
Timing and Approvals
The transaction has been unanimously approved by the boards of both
Starwood Waypoint Homes and Invitation Homes. Following the execution of
the definitive merger agreement, Blackstone, the majority stockholder of
Invitation Homes, delivered a written consent approving the issuance of
Invitation Homes common stock in the merger and the other transactions
contemplated by the merger agreement. The transaction is expected to
close by year-end, subject to approval by Starwood Waypoint Homes
stockholders and other customary closing conditions.
Advisors
Deutsche Bank Securities Inc. and J.P. Morgan Securities LLC are acting
as financial advisors and Simpson Thacher & Bartlett LLP is acting as
legal advisor to Invitation Homes. Morgan Stanley & Co. LLC and Evercore
are serving as financial advisors and Sidley Austin LLP is serving as
legal advisor to Starwood Waypoint Homes.
Merger Announcement Conference Call and Second Quarter 2017 Earnings
Results
In separate press releases issued yesterday and today, Starwood Waypoint
Homes and Invitation Homes each announced their respective results for
the second quarter of 2017.
In light of today’s transaction, the two companies will hold a joint
conference call at 8:30 am Eastern Time today to discuss the
transaction. Invitation Homes and Starwood Waypoint Homes have cancelled
their previously scheduled earnings conference calls.
Interested parties in the United States can access the call by dialing
877-273-3818, passcode 680 092 90, fifteen minutes prior to the start
time. International participants should dial +1 617-597-9370. A link to
access the conference call will be available on the Investor Relations
section of both companies’ websites at http://investors.starwoodwaypoint.com/
and http://ir.invitationhomes.com/.
About Invitation Homes
Invitation Homes (NYSE: INVH) is a leading owner and operator of
single-family rental homes in the United States. Through disciplined
market and asset selection, we have assembled a portfolio of nearly
50,000 high quality homes in 13 major markets (Atlanta, Charlotte,
Chicago, Jacksonville, Las Vegas, Minneapolis, Northern California,
Orlando, Phoenix, Seattle, Southern California, South Florida, Tampa),
with a focus on the Western United States and Florida. We target
desirable neighborhoods in convenient proximity to major employment
centers, good schools, and transportation corridors.
About Starwood Waypoint Homes
Starwood Waypoint Homes (NYSE: SFR) is one of the largest publicly
traded owners and operators of single-family rental homes in the United
States. The Company acquires, renovates, leases, maintains and manages
single-family homes in markets that exhibit favorable demographics and
long-term economic trends, as well as strengthening demand for rental
properties.
Forward-Looking Statements
The information presented herein may contain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements, which are based on current
expectations, estimates and projections about the industry and markets
in which Invitation Homes (“INVH”) and Starwood Waypoint Homes (“SFR”)
operate and beliefs of and assumptions made by INVH management and SFR
management, involve significant risks and uncertainties, which are
difficult to predict and are not guarantees of future performances, that
could significantly affect the financial results of INVH or SFR or the
combined company. Words such as “projects,” “will,” “could,” “continue,”
“expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” “forecast,” “guidance,” “outlook,” “may,” and “might” and
variations of such words and similar expressions are intended to
identify such forward-looking statements, which generally are not
historical in nature. Such forward-looking statements may include, but
are not limited to, statements about the anticipated benefits of the
proposed merger between SFR and INVH, including future financial and
operating results, the attractiveness of the value to be received by SFR
stockholders, the attractiveness of the value to be received by INVH,
the combined company's plans, objectives, expectations and intentions,
the timing of future events, anticipated administrative and operating
synergies, the anticipated impact of the merger on net debt ratios, cost
of capital, future dividend payment rates, forecasts of accretion in
core FFO, AFFO or other earnings or performance measures, projected
capital improvements, expected sources of financing, and descriptions
relating to these expectations. All statements that address operating
performance, events or developments that we expect or anticipate will
occur in the future — including statements relating to expected
synergies, improved liquidity and balance sheet strength — are
forward-looking statements. Pro forma, projected and estimated numbers
are used for illustrative purposes only, are not forecasts and may not
reflect actual results. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions
that are difficult to predict. Our ability to predict results or the
actual effect of future events, actions, plans or strategies is
inherently uncertain. Although we believe the expectations reflected in
any forward-looking statements are based on reasonable assumptions, we
can give no assurance that our expectations will be attained and
therefore, actual outcomes and results may differ materially from what
is expressed or forecasted in such forward-looking statements. Some of
the factors that may materially and adversely affect our business,
financial condition, liquidity, results of operations and prospects, as
well as our ability to make distributions to our stockholders, include,
but are not limited to: (i) national, regional and local economic
climates; (ii) changes in the real estate and single-family rental
industry, financial markets and interest rates, or to the business or
financial condition of either company or business; (iii) increased or
unanticipated competition for the companies' properties; (iv)
competition in the leasing market for quality residents; (v) increasing
property taxes, homeowners’ association fees and insurance costs; (vi)
each company’s dependence on third parties for key services; (vii) risks
related to evaluation of properties, poor resident selection and
defaults and non-renewals by either company’s residents; (viii) risks
associated with acquisitions, including the integration of the combined
companies' businesses; (ix) the potential liability for the failure to
meet regulatory requirements, including the maintenance of REIT status;
(x) availability of financing and capital; (xi) risks associated with
achieving expected revenue synergies or cost savings; (xii) risks
associated with the companies' ability to consummate the merger and the
timing of the closing of the merger; (xiii) the outcome of claims and
litigation involving or affecting either company; (xiv) applicable
regulatory changes; and (xv) those additional risks and factors
discussed in reports filed with the Securities and Exchange Commission
(“SEC”) by INVH and SFR from time to time, including those discussed
under the heading “Risk Factors” in their respective most recently filed
reports on Forms 10-K and 10-Q. Neither INVH nor SFR, except as required
by law, undertakes any duty to update any forward-looking statements
appearing in this document, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date hereof.
Additional Information about the Proposed Transaction and Where to
Find It
This communication relates to the proposed merger transaction pursuant
to the terms of the Agreement and Plan of Merger, dated as of August 9,
2017, by and among INVH, invitation Homes Operating Partnership LP, IH
Merger Sub, LLC, SFR and Starwood Waypoint Homes Partnership, L.P. In
connection with the proposed merger, INVH expects to file with the SEC a
registration statement on Form S-4 that will include a joint proxy
statement of SFR and information statement of INVH that also constitutes
a prospectus (the “joint proxy/information statement/prospectus”) which
joint proxy/information statement/prospectus will be mailed or otherwise
disseminated to INVH stockholders and SFR stockholders when it becomes
available. INVH and SFR also plan to file other relevant documents with
the SEC regarding the proposed transaction. INVESTORS ARE URGED TO
READ THE JOINT PROXY/ INFORMATION STATEMENT/PROSPECTUS AND OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. You may obtain a
free copy of the joint proxy/information statement/prospectus and other
relevant documents (if and when they become available) filed by INVH and
SFR with the SEC at the SEC's website at www.sec.gov.
Copies of the documents filed by INVH with the SEC will be available
free of charge on INVH's website at www.invitiationhomes.com
or by contacting INVH Investor Relations at ir@invitationhomes.com
or at 844-456-4684. Copies of the documents filed by SFR with the SEC
will be available free of charge on SFR's website at www.starwoodwaypoint.com
or by contacting SFR Investor Relations at ir@colonystarwood.com
or at 480-800-3490.
Certain Information Regarding Participants in the Solicitation
INVH and SFR and certain of their respective trustees, directors and
executive officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies in respect of
the proposed merger. You can find information about INVH’s executive
officers and directors in INVH's Annual Report on Form 10-K for the year
ended December 31, 2016 and its Current Reports of Form 8-K filed with
the SEC on February 6, 2017, March 20, 2017 and June 29, 2017. You can
find information about SFR’s executive officers and trustees in SFR’s
Annual Report on Form 10-K for the year ended December 31, 2016, its
Quarterly Report on Form 10-Q for the quarterly period ended March 31,
2017, and its Definitive Proxy Statement on Schedule 14A filed with the
SEC on March 31, 2017 in connection with its 2017 annual meeting of
stockholders. Additional information regarding the interests of such
potential participants will be included in the joint proxy/information
statement/prospectus and other relevant documents filed with the SEC if
and when they become available. You may obtain free copies of these
documents from INVH or SFR using the sources indicated above.
No Offer of Solicitation
This document shall not constitute an offer to sell or the solicitation
of an offer to buy any securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements
of Section 10 of the U.S. Securities Act of 1933, as amended.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170810005509/en/
Media:
Sard Verbinnen & Co
Brooke Gordon/Liz
Zale/Emily Claffey, 212-687-8080
or
For Invitation Homes:
Investor
Relations
Greg Van Winkle, 844-456-INVH
IR@InvitationHomes.com
or
Media
Claire
Buchan Parker, 202-257-2329
cparker@invitationhomes.com
or
For
Starwood Waypoint Homes:
Investor Relations
480-800-3490
IR@colonystarwood.com
or
Media
Jason
Chudoba, 646-277-1249
Jason.chudoba@icrinc.com
Source: Starwood Waypoint Homes