Tricon Capital Group Acquires Silver Bay Realty Trust Corp. for US$1.4 Billion
|Areas||Banking and Finance Law, Commercial Real Estate, Corporate and Commercial, Corporate Finance and Securities, Mergers and Acquisitions, Private Equity, Tax|
Goodmans represented Tricon Capital Group Inc. (“Tricon” or the “Company”, TSX: TCN), a principal investor and asset manager focused on the residential real estate industry, in its acquisition of Silver Bay Realty Trust Corp. (“Silver Bay”). The transaction valued Silver Bay at an enterprise value of approximately US$1.4 billion, consisting of an equity purchase price of approximately $820 million ($21.50 per share) and approximately $600 million of existing debt (net of cash on hand), which was concurrently refinanced.
The transaction was structured as a merger of a subsidiary of Tricon American Homes (“TAH”) and Silver Bay and was financed with the net proceeds of previously completed bought deal public offerings of 20,326,250 subscription receipts and $172.5 million aggregate principal amount of 5.75% extendible convertible unsecured subordinated debentures. The Company’s existing corporate revolving credit facility from the Royal Bank of Canada (“RBC”) and a syndicate of lenders was increased from $235 million to $365 million and the Company drew approximately $70 million on the facility to finance a portion of the Acquisition price. The balance of the acquisition purchase price and amounts required to refinance Silver Bay’s existing debt and pay transaction costs were drawn on a new TAH warehouse credit facility from Deutsche Bank AG and its affiliates in an aggregate amount of approximately $1.2 billion.
Tricon is a principal investor and asset manager focused on the residential real estate industry in North America with approximately C$4.0 billion of assets under management. Tricon owns, or manages on behalf of third-party investors, a portfolio of investments in land and homebuilding assets, single-family rental homes, manufactured housing communities and multi-family development projects.
Silver Bay focuses on the acquisition, renovation, leasing and management of single-family properties for rental income and long-term capital appreciation.