KBS Strategic Opportunity REIT Inc., a publicly registered non-traded real estate investment trust, has agreed to purchase all of the outstanding shares of common stock of Housing REIT Inc. (NASDAQ: RVEN) for approximately $56.9 million.
Reven Housing REIT currently owns 993 single-family rental properties in Alabama, Florida, Georgia, Mississippi, Oklahoma, Tennessee and Texas.
The transaction will be structured as a merger and was unanimously approved by the boards of both companies and will close at the end of October 2019, if approved by Reven stockholders.
Based on Reven management’s current estimate, the per share merger consideration paid to Reven stockholders is expected to be $5.15, which is 21 percent higher than its closing stock price of $4.25 on August 29, 2019, the last reporting day before the company announced the signing of the agreement.
“This acquisition further expands [KBS Strategic Opportunity REIT’s] commitment to the single-family rental business, which is an area of significant potential growth,” said chief executive officer Keith Hall. “The asset class is a strong fit for our investor base, and we look forward to exploring further acquisitions.”
At the time of the merger, each unvested Reven restricted stock award will become fully vested and will automatically convert into the right to receive the per share merger consideration for each share of Reven common stock.
The $56.9 million merger consideration may be increased or decreased by the difference between the amount of Reven’s unrestricted cash available for distribution and $6.5 million.
RBC Capital Markets served as financial advisor to Reven, and Greenberg Traurig served as legal counsel. DLA Piper LLP served as legal counsel to KBS Strategic Opportunity REIT.
Shares of RVEN stock closed at $5.04 on Tuesday.
KBS Strategic Opportunity REIT launched its initial public offering in November 2009 and has raised approximately $637 million in investor equity from the offering and distribution reimbursement plan, as of the second quarter 2019. The company owns seven office properties and one office portfolio consisting of four office buildings and 14 acres of undeveloped land valued at $731.9 million.