KBS Strategic Opportunity REIT to Acquire Reven Housing REIT
September 3, 2019
KBS Strategic Opportunity REIT, Inc. (“SOR”) and Reven Housing REIT, Inc. (“Reven”) (NASDAQ: RVEN) on August 30 announced the signing of a definitive merger agreement under which an indirect, wholly-owned subsidiary of SOR, SOR PORT, LLC (“Merger Sub”), a wholly-owned subsidiary of SOR PORT Holdings, LLC (“Parent”), will acquire all of the outstanding shares of common stock of Reven for cash. The aggregate merger consideration payable for shares of Reven common stock in the merger will equal approximately $56.85 million, to be increased or decreased, as the case may be, by the difference, if any, between the amount of Reven’s unrestricted cash available for distribution as of the closing date of the merger, and $6,500,000. Based on Reven management’s current estimate, the per share merger consideration payable to Reven stockholders in the merger is expected to be $5.15, which amount represents an approximately 21% premium to Reven’s unaffected closing stock price of $4.25 on August 29, 2019, the last reporting day before Reven announced the signing of the merger agreement.
Under the merger agreement, at the effective time of the merger, each unvested Reven restricted stock award will become fully vested and will be automatically converted into the right to receive the per share merger consideration for each share of Reven common stock underlying such award.
In connection with the signing of the merger agreement, Parent has delivered to Reven an equity commitment letter, pursuant to which SOR has committed to purchase, directly or indirectly through one or more affiliated entities, equity securities of Parent for a maximum amount equal to the aggregate merger consideration payable under the merger agreement. The funding of the commitment under the equity commitment letter is not a condition to Parent’s obligation to consummate the merger.
The merger and the other transactions contemplated by the merger agreement have been unanimously approved by the Board of Directors of SOR and approved by the Board of Directors of Reven.
Pursuant to the merger agreement, the closing of the merger is subject to customary closing conditions, including approval by a majority of Reven’s stockholders. The closing of the merger is expected to occur by the end of October, 2019, subject to satisfaction of all closing conditions. Reven’s existing loan agreements with Arbor Agency Lending, LLC, an approved seller/servicer for Federal Home Loan Mortgage Corporation, are expected to remain outstanding following the closing of the merger.
Keith Hall, SOR’s Chief Executive Officer, stated, “This acquisition further expands SOR’s commitment to the single-family rental business, which is an area of significant potential growth. The asset class is a strong fit for our investor base, and we look forward to exploring further acquisitions.”
Peter McMillan, SOR’s Chairman of the Board, added, “This transaction furthers our commitment to corporate investments, particularly in other real estate investment trusts. We see this as complementary to our traditional strengths in property and debt investments, and a source of incremental opportunity.”
Chad Carpenter, Reven’s Chairman of the Board and Chief Executive Officer, stated, “We are delighted to reach an agreement with SOR, which is the result of a comprehensive strategic alternatives process conducted by our Board of Directors. We are confident that this transaction, upon closing, will deliver immediate and substantial cash value to our stockholders.”
About KBS Strategic Opportunity REIT, Inc.
KBS Strategic Opportunity REIT is a non-traded Real Estate Investment Trust (REIT) designed to provide stockholders attractive total returns through the purchase of commercial real estate and related investments that offer attractive risk-adjusted returns. SOR invests across all real asset classes, including debt, equity, and corporate investments, targeting both developed and less liquid markets.
About Reven Housing REIT, Inc.
Reven Housing REIT, Inc. (NASDAQ: RVEN) engages in the acquisition and ownership of portfolios of occupied single-family rental properties in the United States. Reven currently owns and operates 993 single family rental properties in Alabama, Florida, Georgia, Mississippi, Oklahoma, Tennessee and Texas.
For more information, please visit http://www.revenhousingreit.com/.
Source: SEC
