Cortland Partners to Buy Canadian Multifamily REIT for $1.2B
Pure Multi-Family REIT’s portfolio is located in markets throughout the US Sunbelt.
ATLANTA—Locally-based Cortland Partners has reached an agreement with Canada’s Pure Multi-Family REIT to acquire it in an all-cash transaction of $1.2 billion, including net debt. The REIT’s apartment portfolio is located in Texas and Arizona, allowing Cortland to double down on its own Sunbelt-based market strategy. Specifically, Pure Multi-Family owns and operates 22 apartment communities consisting of 7,085 apartment units in these two states. Cortland’s portfolio consists of 155 apartment communities with over 50,000 units in the US and has regional offices in Charlotte, Dallas, Denver, Houston, and Orlando.
Last year the Pure Mult-Family launched a strategic review during which Scotiabank contacted approximately 90 potential strategic and financial purchasers. One US company that had been very interested in the REIT was American Landmark / Electra America, which also submitted a proposal to acquire Pure Multi-Family.
The transaction is expected to close by Q4 2019.
Shareholders will receive $7.61 in cash in the transaction, which represents a premium of 15% to the closing price on the Toronto Stock Exchange on June 26, the last trading day before the proposal was announced.
There is a 25-day “go shop” period included in the deal.
Pure Multi-Family REIT went public in June 2012 and since then it has generated a total return of more than 176%, or approximately 16% on a compound annual basis, according to Robert King, chairman of the board. “We have accomplished significant growth over the past seven years, having built an institutional quality multi-family apartment portfolio in highly desirable markets in the US Sunbelt,” he says in prepared remarks.
Scotiabank is acting as exclusive financial advisor to Pure Multi-Family. Farris is acting as legal counsel to the Special Committee and Koffman Kalef to the Board of Directors. Fort Capital Partners has provided the Special Committee and the Board of Directors with a fairness opinion in respect of the transaction.
Lazard is acting as sole financial advisor to Cortland. King & Spalding is acting as US legal counsel to Cortland, and McCarthy Tétrault is acting as Canadian legal counsel to Cortland.