BY Fraser Tennant
In an all-cash transaction valued at approximately $4.6bn, including debt, Education Realty Trust Inc (EDR), one of the largest owners, developers and managers of collegiate housing in the US, is to be acquired by Greystar Student Housing Growth and Income Fund, LP (GEdR), an affiliate of Greystar Real Estate Partners.
Under the terms of the definitive merger agreement, EDR's stockholders will receive $41.50 per share in cash. The agreement to be acquired by the newly-formed, perpetual-life fund GEdR has been unanimously approved by EDR’s board of directors.
"For more than 50 years, EDR has been a pioneer in the student housing industry, partnering with some of the most prestigious universities in the US to enhance and transform campus housing and achieve student success goals," said Randy Churchey, EDR’s chief executive chairman of the board of directors. "As a public company, one of our priorities is to maximise stockholder value and we believe this transaction with Greystar accomplishes that goal.”
EDR owns or manages 79 communities with more than 42,300 beds serving 50 universities in 25 US states. EDR’s acquirer, Greystar, is a leading, fully integrated real estate company which offers expertise in investment management, development and property management of rental housing properties globally.
"We are pleased to partner with a group of world-class investors to acquire one of the nation's best student housing operators and developers,” said Bob Faith, founder, chairman and chief executive of Greystar Real Estate Partners. “EDR has one of the highest quality and best located student housing portfolios in the US and it will seed Greystar's newly formed flagship student housing-focused perpetual-life fund. Combined, we will leverage our expertise, vision and financial strength to serve our current university partners as well as further expand our global student housing footprint.”
The EDR/GEdR transaction is currently expected to close in the second half of 2018 and is subject to customary closing conditions, including the approval of EDR's stockholders.
The deal adviser for EDR was BofA Merrill Lynch, while Morrison & Foerster LLP and Venable LLP were its legal advisers. J.P. Morgan Securities LLC was financial adviser to Greystar, while Hogan Lovells US LLP and King & Spalding were its legal advisers.
Mr Churchey concluded: “We are certain today's announcement is in the best interest of all of EDR's stakeholders, including university partners, employees and stockholders."