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C-III Capital Partners to Buy Resource America for $207 Million

Resource America, Inc. (NASDAQ: REXI), an asset management company and external advisor to four non-traded REITs, has entered into an agreement to be acquired by C-III Capital Partners LLC, a commercial real estate services company. Under the terms of the agreement, Resource America stockholders will receive $9.78 per share in cash, or approximately $207 million.

C-III intends to retain the leadership and staff of Resource America’s asset management businesses. The transaction, which is expected to close late in the third quarter or early in the fourth quarter of 2016, is subject to approval by Resource stockholders, regulatory approvals and other customary closing conditions. The acquisition is not subject to any financing conditions.

The agreement was unanimously approved by Resource America’s board of directors following a review of strategic and financial alternatives that the company announced in January 2016.

“We are very pleased with this transaction, which we believe provides excellent value to our shareholders and positions the businesses that we have created for further growth,” said Jonathan Cohen, president and chief executive officer of Resource America.

The price per share of $9.78 represents a premium of more than 128 percent from REXI’s closing price on January 28, 2016, the day before it announced it would be reviewing strategic alternatives, and a 51 percent premium over its closing price on May 20, 2016.

Yesterday, following the announcement, REXI stock jumped $3.15 per share, or 48.8 percent, before closing at $9.61 per share.

Resource America, which is the external manager of one publicly traded REIT, four non-traded REITS and two other registered investment companies, has $22.4 billion in gross assets under management as of March 31, 2016, and owns and manages approximately 30,000 multifamily units in more than 20 states. It has raised a total of $1.5 billion through the independent broker dealer network, including $635 million in capital for Resource Real Estate Opportunity REIT and $556 million for Resource Real Estate Opportunity REIT II.

C-III Capital Partners currently manages $3.8 billion on behalf of institutional investors in both debt and equity funds, a separate account and several structured product vehicles, including CRE-CDOs and ReREMICs. Its mortgage origination business has originated more than $4.5 billion of commercial real estate loans since 2010. C-III Capital Partners is also a special and primary loan servicer, responsible for more than 100 CMBS trusts comprising more than $100 billion of commercial real estate loans.

The combined company will manage more than $25 billion of gross assets, and own and/or manage more than 70,000 apartment units across the U.S.

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