AUSTIN, TX—Residential and mixed-use developer Forestar Group Inc., which has narrowed its focus and sold off hundreds of millions of dollars' worth of assets in the past two years, has agreed to be acquired by Starwood Capital Group, the two companies said Thursday evening. Starwood will acquire all of the outstanding shares of Forestar common stock for $14.25 per share; the all-cash deal is valued at about $605 million and represents an 8.2% premium to the 90-day volume weighted average price on Forestar stock.
“Over the past 18 months Forestar has significantly reduced costs and outstanding debt, exited non-core assets and focused on its core community development business,” says Forestar's board chairman, James A. Rubright. “While executing these key initiatives, the board and management have been evaluating longer-term strategic alternatives,” and concluded that a sale to Starwood represents “the best option to maximize stockholder value.”
Following a call for changes from shareholders SpringOwl Capital and Cove Street Capital in early 2015, Forestar began reshaping its board with input from the two investors. Later that year, it announced a plan to focus on its core business, and in 2016 sold off more than $480 million of non-core assets in the multifamily, lodging, timberland and energy sectors.
As of this past Sept. 30, the company owned directly or through ventures interest in 55 residential and mixed-use projects comprised of approximately 7,000 acres of real estate located in 11 states and 15 markets. At the end of last year, the company's remaining non-core assets included over 523,000 net acres of owned mineral assets located mainly in Texas, Louisiana, Georgia and Alabama, 19,000 acres of timberland and undeveloped land (including mitigation banking), four multifamily assets and approximately 20,000 acres of groundwater leases in central Texas. The owned mineral assets traded for $85.6 million this past February.
Subject to shareholder approval, the sale to Starwood is expected to close in the third quarter. JMP Securities LLC is acting as financial advisor to Forestar, with Skadden, Arps, Slate, Meagher & Flom LLP acting as legal advisor. Kirkland & Ellis LLP is acting as legal advisor to Starwood in the sale.
AUSTIN, TX—Residential and mixed-use developer Forestar Group Inc., which has narrowed its focus and sold off hundreds of millions of dollars' worth of assets in the past two years, has agreed to be acquired by Starwood Capital Group, the two companies said Thursday evening. Starwood will acquire all of the outstanding shares of Forestar common stock for $14.25 per share; the all-cash deal is valued at about $605 million and represents an 8.2% premium to the 90-day volume weighted average price on Forestar stock.
“Over the past 18 months Forestar has significantly reduced costs and outstanding debt, exited non-core assets and focused on its core community development business,” says Forestar's board chairman, James A. Rubright. “While executing these key initiatives, the board and management have been evaluating longer-term strategic alternatives,” and concluded that a sale to Starwood represents “the best option to maximize stockholder value.”
Following a call for changes from shareholders SpringOwl Capital and Cove Street Capital in early 2015, Forestar began reshaping its board with input from the two investors. Later that year, it announced a plan to focus on its core business, and in 2016 sold off more than $480 million of non-core assets in the multifamily, lodging, timberland and energy sectors.
As of this past Sept. 30, the company owned directly or through ventures interest in 55 residential and mixed-use projects comprised of approximately 7,000 acres of real estate located in 11 states and 15 markets. At the end of last year, the company's remaining non-core assets included over 523,000 net acres of owned mineral assets located mainly in Texas, Louisiana, Georgia and Alabama, 19,000 acres of timberland and undeveloped land (including mitigation banking), four multifamily assets and approximately 20,000 acres of groundwater leases in central Texas. The owned mineral assets traded for $85.6 million this past February.
Subject to shareholder approval, the sale to Starwood is expected to close in the third quarter. JMP Securities LLC is acting as financial advisor to Forestar, with
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
