Colony Financial, Inc. (NYSE:CLNY) (the “Company”) announced today that
it completed the combination with Colony Capital, LLC, the parent
company of its manager, including the contribution of substantially all
of Colony Capital, LLC’s real estate and investment management business
and operations. The transaction was approved by an overwhelming majority
of its shareholders at the Special Meeting on March 31, 2015 in accord
with the prior approval and recommendation of a special committee
comprised of independent and disinterested members of CLNY’s board of
directors.
As a result of the transaction, the Company, which has been renamed
Colony Capital, Inc., becomes an internally-managed real estate and
investment management company with more than 300 employees in 14 offices
around the globe. The Company will continue to be listed as a
publicly-traded real estate investment trust on the New York Stock
Exchange under the same ticker symbol, “CLNY”.
The Company will now hold and conduct Colony Capital’s real estate and
investment management business and operations. The transaction included
the formation of an umbrella partnership real estate investment trust
(UPREIT) with a subsidiary operating partnership that holds all the
assets and directly or indirectly conducts substantially all the
business of the Company. The UPREIT structure is tax efficient and
provides the Company with more competitive options when making
investments. While the Company continues to hold its significant
ownership stake in Colony American Homes (“CAH”) and will receive
certain cost reimbursements under a transitional services agreement with
CAH, it will not acquire Colony Capital, LLC’s ownership interest in CAH
or receive management fees from CAH due to the internalization of CAH’s
management in November 2014.
The combined company will be led by Colony Capital’s key professionals,
including Executive Chairman Thomas J. Barrack, Jr. and Chief Executive
Officer Richard B. Saltzman, who have both entered into five-year
employment agreements with the Company.
“This combination allows Colony Capital to expand its unique global
culture and brand by utilizing its strong balance sheet to
create bespoke investment products and platforms in real assets and at
opportunistic points in cycles and geographies,” Mr. Barrack said.
“The transaction is seamless for Colony's employees,” Mr. Saltzman said.
“It is business as usual with minimal integration logistics as everyone
already works together as a team, albeit previously across separate
legal entities.”
Mr. Saltzman noted that the Company plans to continue Colony Capital's
role of forming the general partner or sponsor of private equity funds
and other investment vehicles, allowing the Company to capture fees and
carried interest from the funds and vehicles it sponsors and manages.
Furthermore, the Company intends to invest primarily through these
sponsor positions prospectively as opposed to just directly in assets,
which the Company expects to generate more accretive economics for its
shareholders while simultaneously providing substantially greater
alignment for limited partners and other investors in those funds and
vehicles.
About Colony Capital, Inc.
Colony Capital, Inc. is a leading global real estate and investment
management firm headquartered in Los Angeles, California with 14 offices
in 10 countries and more than 300 employees. Prior to its combination
with Colony Financial, Inc. in 2015, Colony Capital, LLC sponsored $24
billion of equity across a variety of distinct funds and investment
vehicles that collectively invested over $60 billion of total capital.
The Company targets attractive risk-adjusted investment returns and its
portfolio is primarily composed of: (i) general partner interests in
Company sponsored private equity funds and vehicles; (ii) real estate
equity; and (iii) real estate and real estate-related debt. The Company
has elected to be taxed as a real estate investment trust, or REIT, for
U.S. federal income tax purposes. For more information, visit www.colonyinc.com.
Advisors
Morgan Stanley & Co. LLC acted as financial advisor to the Special
Committee of the Board of Directors of the Company in connection with
the transaction. Wachtell, Lipton, Rosen & Katz acted as legal advisor
to the Special Committee of the Board of Directors in connection with
the transaction. Hogan Lovells acted as legal advisor to the Company in
connection with the transaction. Goldman, Sachs & Co. acted as financial
advisor to Colony Capital, LLC in connection with the transaction.
Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to
Colony Capital, LLC in connection with the transaction.
Cautionary Statement Regarding Forward-Looking Statements
This communication may contain forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements
relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts. In some cases, you can
identify forward-looking statements by the use of forward-looking
terminology such as “may,” “will,” “should,” “expects,” “intends,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,” or
“potential” or the negative of these words and phrases or similar words
or phrases which are predictions of or indicate future events or trends
and which do not relate solely to historical matters. Forward-looking
statements involve known and unknown risks, uncertainties, assumptions
and contingencies, many of which are beyond our control, and may cause
actual results to differ significantly from those expressed in any
forward-looking statement.
Neither the Company nor any other person assumes responsibility for the
accuracy or completeness of any of these forward-looking statements. You
should not rely upon forward-looking statements as predictions of future
events. The forward-looking statements speak only as of the date of this
communication. The Company is not under any duty to update any of these
forward-looking statements after the date of this communication, nor to
conform the Company’s prior statements to actual results or revised
expectations, and the Company does not intend to do so.
Copyright Business Wire 2015