Listed real estate investment trust Jernigan Capital Inc. (NYSE: JCAP), an owner of self-storage facilities and a capital partner for self-storage entrepreneurs, has agreed to merge with an affiliate of NexPoint Advisors L.P.
Jernigan Capital will be acquired by NexPoint in an all-cash transaction valued at approximately $900 million, including debt and preferred stock to be assumed or refinanced.
The agreement has been unanimously approved by the Jernigan board. The transaction was recommended to the board by a transaction committee consisting of all directors, except Jim Dondero, founder and president of NexPoint.
Under the terms of the agreement, holders of JCAP’s common stock and holders of units of operating company interests in Jernigan Capital Operating Company LLC will receive $17.30 per share/unit in cash. This represents a 30 percent premium over the 90-day volume-weighted average share price ending July 31, 2020 and a 23 percent premium over the July 31, 2020 closing share price.
Holders of the company’s Series B preferred stock will receive cash equal to $25.00 per share plus all accrued dividends (whether or not authorized or declared) up to, but excluding, the date the merger is consummated.
“Since our initial public offering in March of 2015, we have built from the ground up a best in class portfolio of newly constructed Generation V self-storage facilities in some of the best submarkets in the United States, along with a development platform that is the first of its kind in our sector,” said John Good, Jernigan’s chief executive officer and chairman. “We believe this transaction with NexPoint validates the quality of the portfolio of self-storage properties and the corporate platform we have built and accomplishes the goal of maximizing value for our stockholders during a very difficult time for all of us.”
The transaction, which is currently expected to close in the fourth quarter of 2020, is subject to customary closing conditions, including the approval of JCAP’s stockholders, who will vote on the transaction at a special meeting on a date to be announced. The transaction is not contingent on receipt of financing by NexPoint.
Shares of JCAP stock closed at $17.18 on Monday, up 22.7 percent from Friday’s close of $14.00 per share.
NexPoint Advisors, L.P. is a registered investment adviser to a suite of funds and investment offerings, including a closed-end fund, a business development company, an interval fund, and various real estate vehicles.