Independence Realty Trust and Steadfast Apartment REIT have entered into a definitive merger agreement under which STAR will merge into IRT, with IRT surviving as the continuing public company.
The merger will join together two high-quality portfolios with complementary geographic footprints in the Sunbelt region of the United States.
The combined company will own a portfolio of 131 apartment communities comprising approximately 38,000 units across 16 states. The combined company is expected to have a pro forma equity market capitalization of approximately $4 billion and a pro forma total enterprise value of approximately $7 billion.
The proposed merger will create a portfolio focused in urban and suburban locations in Georgia, North Carolina, Tennessee, Kentucky, Ohio, Oklahoma, Indiana, Texas, Florida, South Carolina, Missouri, Alabama, Colorado, Kansas, Illinois, and Virginia. The combined company’s ten largest markets by unit count would be Atlanta, Dallas/Ft. Worth, Denver, Oklahoma City, Louisville, Columbus, Indianapolis, Raleigh-Durham, Houston, and Memphis.
Commenting on the proposed merger, Scott F. Schaeffer, IRT’s Chairman and CEO, said, “The combination of IRT and STAR’s highly complementary portfolios will create a leading multifamily REIT in the attractive Sunbelt region, that we believe will be well-positioned to unlock significant value and improve our market diversification.
“We expect to realize notable economies of scale and synergies, develop a more competitive operating platform and further capitalize on our redevelopment initiative. We’re excited to partner with STAR and welcome their team, as we together plan to capture many opportunities in our high-growth markets and deliver value for our stakeholders for years to come.”
Rodney F. Emery, STAR’s CEO, added “We believe that our business combination will allow us to more effectively compete in the multifamily sector and realize greater earnings potential. This is a natural combination that is expected to uniquely position us to strengthen our presence in U.S. communities where we see substantial room for growth.”
A team from Morrison & Foerster advised Steadfast on the deal. the team included Heath Linsky, Mary Katherine Rawls, Tyler Miller, Paul J. Aylward II, Larry Medvinsky,, Justin Salo, Andrew Campbell, Shane Shelley, Domnick Bozzetti, Philip Jaworskyj, Kristie Espiritu, Andrew Turnbull, Thomas Fileti, Susannah Cupp and Tushna Gamadia.