SANTA MONICA, CA—Thomas Barrack's Colony Capital LLC, with $19 billion of assets, has agreed to combine management with Colony Financial Inc., a real estate investment trust that was also launched by the billionaire investor. The $675.5 million deal would mean that the combined company, Colony Capital Inc., would be led by Barrack, and chief executive officer, Richard Saltzman, and would employ the full management and investment team of Colony Capital LLC.
As structured, the payment would come in the form of Colony Financial securities, and $547.5 would be paid up front, with another $110 million tied to performance and fundraising targets.
In reporting the story Tuesday, Bloomberg said the merger aims to benefit investors in both companies by linking Colony Capital's management capabilities with Colony Financial's holdings. Colony Capital and CLNY expect to close the transaction by the end of the first half of 2015. Following the closing of the companies expect that CLNY would maintain its REIT status.
Barrack started his investment career in the 1980s with a focus on distressed real estate, Bloomberg says. His company owns and manages investments in real estate, the film industry, and the former estate of pop star Michael Jackson.
Colony Financial released its third-quarter financial report separately on Tuesday, highlighting a net income of $32 million, up from $21.1 million, or a year earlier.
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