Independence Realty, Steadfast Apartment REIT Reach $7B Merger Deal
July 27, 2021 | S&P Global Market Intelligence
Independence Realty Trust Inc. and Steadfast Apartment REIT Inc. agreed to merge to create a company with an expected pro forma equity market capitalization of about $4 billion and pro forma total enterprise value of about $7 billion.
Steadfast Apartment will merge with and into Independence Realty, with the latter as the surviving entity. The merged company will keep the Independence Realty Trust name and trade under the ticker IRT.
Under the terms of the merger agreement, each Steadfast Apartment common share will be converted into 0.905 share of newly issued Independence Realty common stock, including cash in lieu of fractional shares. IRT recently closed at $19.91 per share on July 26, 2021, indicating a market value for the Steadfast Apartment equivalent shares of $18.02.
On a pro forma basis, the combined company’s equity will be evenly owned by the respective stockholders of Independence Realty and Steadfast Apartment after the merger.
The deal is expected to close during the fourth quarter, subject to approvals from the shareholders of both parties and other closing conditions.
Upon merger closing, the size of Independence Realty’s board will be expanded to 10 members, comprising five incumbent directors each of Independence Realty and Steadfast Apartment. Independence Realty Chairman and CEO Scott Schaeffer will hold the same roles at the combined company.
James Sebra will continue as CFO of the combined company, Farrell Ender will remain president, and Independence Realty Executive Vice President and General Counsel Jessica Norman will be chief legal officer. Steadfast Apartment President, CFO and Treasurer Ella Neyland will be COO of the combined company.
The merger will combine two portfolios with complementary geographic footprints in the U.S. Sunbelt region.
On a pro forma basis, the merged entity will own a portfolio of 131 apartment communities comprising about 38,000 units across 16 states.
Barclays is the lead financial adviser, BMO Capital Markets is financial adviser and Troutman Pepper Hamilton Sanders LLP is legal adviser to Independence Realty. RBC Capital Markets and Robert A. Stanger & Co. are financial advisers, and Morrison & Foerster LLP is legal adviser to Steadfast Apartment.
