The deal allows CharterMac to terminate its management with RCC affiliate Related Charter LP and to become a self-advised, self-managed company. CharterMac officials say the acquisition will expand its access to capital, create a more efficient cost structure for future growth, diversify revenue sources and business expansion and eliminate perceived conflicts of interest.
"The combination of CharterMac and Related Capital will create one of the largest, streamlined multifamily finance platforms in the nation," says CharterMac chairman Stephen M. Ross. Selling principals in addition to Ross include RCC executive managing partners Stuart J. Boesky, Alan P. Hirmes, Marc D. Schnitzer and Denise L. Kiley.
"The acquisition of Related Capital will allow CharterMac to further diversify its revenue sources and expand its business lines, while eliminating the perceived conflicts of interest associated with an external management structure," Notes Boesky.
The transaction will include an initial $210-million payment, consisting of $50 million in cash and $160 million in special common units of the newly created CharterMac subsidiary CharterMac Sub. A contingent payment of up to $128 million on additional SCUs is expected to be paid simultaneously.
The transaction has received unanimous approval by the RCC board but still faces a vote by the common shareholders.
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