Colony/NorthStar Merger Complete
Colony NorthStar Inc. (NYSE: CLNS) has completed the merger of Colony Capital (NYSE: CLNY), NorthStar Asset Management Group Inc. (NYSE: NSAM) and NorthStar Realty Finance Corp. (NYSE: NRF). NorthStar Asset Management Group, spun off from NorthStar Realty in July 2014 is the sponsor of NorthStar’s non-traded REITs and other direct investment offerings sold through the independent broker-dealer channel. NorthStar Realty Finance was a publicly traded REIT that is managed by an affiliate of NSAM.
The transaction was originally announced on June 3, 2016 and approved by all three companies’ stockholders at their respective special meetings held on December 20, 2016.
Colony NorthStar currently has an equity market capitalization of approximately $9 billion and assets under management of $58 billion, managing capital on behalf of its stockholders, institutional and retail investors in private funds and non-traded and traded real estate investment trusts and 1940 Act companies.
Colony NorthStar said the benefits of the merger include a larger, more diversified and stable investment portfolio, wider access to capital sources, a stronger balance sheet and improved liquidity, increased scale and market exposure, and cost savings of approximately $115 million (approximately $80 million of cash savings and $35 million of stock-based compensation savings).
The 10-member board of directors, eight of whom are independent and all elected annually by majority voting standards, opted out of Maryland Unsolicited Takeovers Act and adopted additional shareholder-focused governance policies.
“We are delighted to complete the merger of these three great companies leading to increased scale, diversity and value creation opportunities for Colony NorthStar and its stockholders,” said Thomas Barrack, Jr., executive chairman of the board, commented. “The closing of this transformative transaction represents a milestone in our collective long-term strategy of building a leading global real estate business focused on a core set of real estate verticals in addition to a top-tier institutional and retail investment management business.”
In addition to board chairman Barrack and executive vice chairman David Hamamoto, the board is comprised of Nancy Curtin, George Parker, John Somers and John Steffens, all former directors of Colony; Justin Metz, former director of NSAM; and Charles Schoenherr, former director of NRF. Douglas Crocker II and Jon Fosheim were also elected to the company’s board. Richard Saltzman will serve as Colony NorthStar’s chief executive officer.
In accordance with the merger agreement, a dividend of $0.04444 per share of Colony common stock shall be paid to former Colony stockholders representing a pro rata dividend for the period from January 1, 2017 through January 10, 2017 of the quarterly dividend rate of $0.40 per Colony share.
A dividend of $0.04444 per share of NRF common stock shall be paid to former NRF stockholders representing a pro rata dividend for the period from January 1, 2017 through January 10, 2017 of the quarterly dividend rate of $0.40 per NRF share.
A one-time special dividend of $1.16 per share of NSAM common stock shall be paid to former NSAM stockholders.
Colony NorthStar has property holdings in the healthcare, industrial and hospitality sectors, opportunistic equity and debt investments and an embedded institutional and retail investment management business. The company owns NorthStar Securities, a broker-dealer platform which raises capital in the retail market.
