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CHARLOTTE, NC-In a $766-million deal, the board of directors of locally based BNP Residential Properties, Inc. has agreed to merge with a wholly owned subsidiary of Babcock & Brown Real Estate Investments LLC. The deal is expected to close in the fourth quarter.
The transaction calls for Babcock & Brown to acquire all of BNP's common stock for $24 per share, cash. The total deal value includes the equity shareholder acquisition price of approximately $316 million and the ability to either assume or refinance approximately $450 million of existing BNP debt, according to a press release.
BNP Residential Properties is a multifamily REIT, owning and operating 32 apartment communities with a combined 8,180 units in North Carolina, South Carolina and Virginia. It is also a general partner of partnerships that own three communities with a combined 713 units. In addition to the apartment properties, BNP owns 40 properties that are leased on a triple-net basis to a restaurant operator.
"Babcock & Brown's primary interest in BNP is its high-quality apartment portfolio of 8,180 apartment units in North Carolina, South Carolina and Virginia, with an average age of 14 years, which it owns and operates. The overall occupancy is currently 95% and rental rates are experiencing strong growth from continuing improvement in market conditions," Dan Brickman, head of Babcock & Brown US Real Estate, explains in a statement.
"The merger allows our shareholders the opportunity to fully realize the market value of BNP's assets, while providing our employees an opportunity to continue to grow the BNP franchise with the backing of a global real estate player in Babcock & Brown," BNP chairman Philip Payne says in a statement.
The BNP merger comes on the heels of Babcock & Brown's acquisition of Alliance Holdings' portfolio earlier this year. When given final approval by BNP's shareholders, the deal will push Babcock & Brown's multifamily portfolio to more than 28,000 units in nine states. It will also decrease Babcock & Brown's "concentration in Texas to 40% and strengthening our presence in the Southeast while maintaining our acquisition discipline of focusing in the high-job growth Sunbelt states," Brickman adds.
Babcock & Brown corporate headquarters are in Sydney. The global investment and advisory firm also has administrative hub offices in Sydney, San Francisco, New York, Munich and London and 21 offices worldwide.
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