Mid-America Apartment Communities on New Buying Spree

Apartment-only real estate investment trust Mid-America Apartment Communities  (NYSE: MAA  ) once again is snapping up properties, this time announcing Monday that it is adding multifamily housing operator Colonial Properties Trust (UNKNOWN: CLP.DL  ) to its portfolio in an $8.6 billion transaction. 

MAA is a self-administered, self-managed apartment-only REIT currently owning, or having ownership interest in, 49,873 apartment units across  states in the Sunbelt region of the United States. Colonial is a Sunbelt-focused REIT owning or having partial ownership interest in 35,181 apartment units.

Mid-America CFO Albert M Campbell said, "Our goal is to create one of the strongest balance sheets in the sector, providing us the financial flexibility in the capital markets to manage our cost of capital, allowing us to capitalize on business opportunities, ultimately supporting the growth of the combined company, and the security of our dividend to our shareholders."

Under the terms of the agreement, each share of Colonial Properties Trust will be converted into 0.36 shares of newly issued MAA stock, and the combined company will be an UPREIT, an umbrella partnership real estate investment trust, which allows partners the opportunity to convert their ownership of one or more of their properties into an interest that can be converted into a security. 

Following the merger, former MAA equity holders will hold approximately 56% of the combined company's equity, and former Colonial equity holders will hold approximately 44%.  The all-stock merger is intended to be a tax-free transaction. With both boards of directors having unanimously approved the transaction, the deal is expected to close during the third quarter of 2013.

The new company will have a combined asset base consisting of approximately 85,000 multifamily units in 285 properties. It expects to realize savings of $25 million over an 18-month period during which the companies will become fully integrated. The combined company is expected to have a pro forma equity market capitalization of approximately $5.1 billion and a total market capitalization of $8.6 billion.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2470637, ~/Articles/ArticleHandler.aspx, 10/1/2016 5:08:36 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 7 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

12/31/1969 7:00 PM
CLP.DL $0.00 Down +0.00 +0.00%
Colonial Propertie… CAPS Rating: ***
MAA $93.99 Down -2.16 -2.25%
Mid-America Apartm… CAPS Rating: **