Starwood Waypoint, Colony American to Merge

OAKLAND, CA and SCOTTSDALE, AZ—In the first major consolidation within the single-family rental space, Starwood Waypoint Residential Trust and Colony American Homes said Monday they have agreed to merge. The combined internally managed company is expected to own and manage over 30,000 homes and have an aggregate asset value of $7.7 billion post-merger. Former SWAY shareholders will own 41% of the company, while former CAH shareholders will own 59%.

“This merger is a transformative event for SWAY and for our industry,” says Barry Sternlicht, CEO and chairman of Starwood Capital Group. “Combining two best-in-class teams, with a superior portfolio of homes in carefully selected geographic markets, positions us to deliver long-term capital appreciation for our shareholders while earning compelling current yields at or above those currently achievable in other major real estate asset classes.”

Adds Thomas J. Barrack Jr., executive chairman of Colony Capital Inc., “We believe this merger demonstrates the power of scale and consolidation and really crystallizes the long-term durability of the single-family rental industry; this combination of CAH and SWAY truly redefines this asset class, and the opportunity in front of us is immense.” Barrack and Sternlicht will serve as non-executive chairmen of the combined company, which will use SWAY's manager.

Fred Tuomi, president and COO of CAH, will serve as CEO, while SWAY's CEO, Doug Brien, will serve as president and COO. Arik Prawer, CFO at CAH, will serve as in the same capacity at the combined company. Its corporate and operational headquarters will be in Scottsdale, AZ, while maintaining a significant presence in Oakland, CA.

SWAY was advised by Moelis & Co. and Sidley Austin LLP, while the special committee of its board was advised by Wells Fargo Securities and Wachtell, Lipton, Rosen & Katz. CAH was advised by Morgan Stanley; Skadden, Arps, Slate, Meagher & Flom LLP; and Clifford Chance US LLP.