Jernigan Capital Enters $900M Merger Agreement
The self-storage REIT will be taken private in a deal valued at approximately $900 million.
Self-storage REIT Jernigan Capital announced a definitive merger agreement with NexPoint, an affiliate of NexPoint Advisors LP. The REIT will be taken private in a deal valued at approximately $900 million.
The $900 million agreement, which is an all-cash deal, includes debt and preferred stock to be assumed or refinanced. The company said the deal is expected to close in the fourth quarter of 2020. JCAP owns self-storage facilities across the country. According to their website, they also provide debt and equity capital to private developers, owners and operators of self-storage facilities.
The agreement was unanimously approved by JCAP’s board of directors. JCAP CEO and chairman John Good says the company “built from the ground up a best in class portfolio of newly constructed Generation V self-storage facilities.”
“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,” adds Good. ”We are certain today’s announcement is in the best interests of all of JCAP’s stakeholders.”
In order for the deal to go through, JCAP’s stockholders must vote to approve the transaction. The meeting to vote will be announced at a later date.
As part of the merger agreement, JCAP will discontinue its regular quarterly dividends. JCAP’s common stock and holders of units of operating company interests will receive $17.30 per share/unit in cash. This is a 30% premium over the 90-day volume-weighted average share price ending July 31, 2020.
“NexPoint has long admired and supported Jernigan Capital’s unique self-storage business model and platform,” said Jim Dondero, NexPoint’s founder and president. “We plan to build on this vision as a private company, maintaining unparalleled asset quality and continuing the current growth trajectory. With our combined expertise, scale and financial strength, we are well-positioned to execute this vision and further expand the company’s national footprint.”