CHARLOTTE, N.C., Oct. 16, 2015 /PRNewswire/ -- Campus Crest
Communities, Inc. (NYSE: CCG) (the "Company" or "Campus Crest"),
today announced that it has entered into a definitive merger
agreement with affiliates of Harrison Street Real Estate Capital,
LLC ("Harrison Street") pursuant to
which Harrison Street will acquire
all issued and outstanding shares of common stock of Campus Crest
in a transaction involving total estimated merger consideration of
$7.03 per share, which amount
includes net sale proceeds currently estimated to be valued at up
to $0.13 per share (based on current
exchange rates) from the separate sale of the Company's ownership
interest in its evo Montreal joint
venture ("Montreal Sale"). Including the assumption or
repayment of various indebtedness of Campus Crest, the overall
transaction value is $1.9
billion. The merger agreement was unanimously approved
by the Board of Directors of the Company.
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Under the terms of the merger agreement, the final merger
consideration will be determined following the closing of the
Montreal Sale, currently expected to occur before October 30, 2015, pursuant to a sale agreement
with the Company's joint venture partner (the "Montreal Sale
Agreement"). Assuming the Montreal Sale is consummated on the
terms and conditions set forth in the Montreal Sale Agreement, the
total per share consideration to be received by Campus Crest
shareholders is estimated to be $7.03
per share, consisting of $6.90 per
share in cash (the "Cash Consideration"), plus a pro-rata portion
of the net proceeds from the Montreal Sale (the "Contingent
Consideration"), currently estimated to be $0.13 per share based on current exchange
rates.
The Cash Consideration and the Contingent Consideration could be
considerably less if the Montreal Sale is not closed prior to the
closing of the merger, or if the Company sells the Montreal joint venture interests on terms
other than those currently provided for in the Montreal Sale
Agreement. If the proceeds of the Montreal Sale are
insufficient to fully satisfy the outstanding debt on the
properties owned by the Montreal
joint venture, then the Company would be obligated to contribute to
the repayment of the deficiency in accordance with its outstanding
guaranty of the debt, currently approximately CAD$56.0 million. In such event, the Cash
Consideration per share would be reduced by a pro-rata portion of
the amount necessary to discharge the guaranty.
If the Montreal Sale does not occur prior to the closing of the
merger with Harrison Street, the
merger agreement provides for the creation of a non-transferrable
contingent value right ("CVR") whereby shareholders will receive
approximately $6.23 per share in cash
at the closing of the merger (based upon current exchange rates)
and one CVR per share. If the CVRs are issued, a
representative of the shareholders will be authorized to conduct a
sale of the Montreal joint venture
and each CVR will represent a share of the net proceeds from the
sale of the Montreal joint venture
and release of the Company's guaranty of the joint venture's
indebtedness. Though dependent upon the final sales price of Campus
Crest's interest in the evo Montreal properties, the Company currently
estimates the value of the CVR at approximately $0.80 per share based on the expected sales price
of the Montreal properties and
current exchange rates. If the net proceeds from the sale of
the Montreal properties are lower
than expected or are not sufficient to pay off the guaranteed
indebtedness, then the value of the CVR could be substantially
less.
The total estimated consideration represents a 24% premium over
the most recent closing stock price on October 16, 2015, and a 35% premium over the
Company's 60-day volume weighted average price.
Richard Kahlbaugh, Non-Executive
Chairman of Campus Crest, said, "Beginning in October of 2014, our
Board initiated an undertaking to simplify the business model,
change executive management and maximize shareholder value through
a comprehensive strategic review process. We are pleased to
announce that after thoroughly analyzing numerous proposals,
including a number of qualified potential buyers and a range of
alternative transactions, the Board unanimously determined that
this transaction is the best course of action in achieving our goal
to maximize shareholder value. We are pleased that Harrison Street recognizes the value inherent in
our portfolio of high-quality student housing properties."
"As a significant owner of student housing assets, we are
pleased to add these attractive properties to our portfolio.
The need for high-quality off-campus housing continues to grow and
we believe this sector has strong long-term fundamentals that will
drive sustainable returns," said Harrison
Street co-founder, President and CEO Christopher Merrill.
Approvals and Anticipated Merger Closing
Although completion of the merger is contingent upon customary
closing conditions, the transaction is not subject to a financing
condition. The Company will convene a special meeting to seek the
approval of Campus Crest shareholders. The transaction is currently
anticipated to close during the first quarter of 2016.
In connection with the closing of the transaction, the parties
intend that Campus Crest's $100,000,000 of 4.75% Senior Exchangeable Notes
Series A Notes due 2018 will be repaid, and that Campus Crest's
$152,500,000 of 8.0% Series A
Cumulative Redeemable Preferred Stock will be redeemed.
Moelis & Company LLC acted as financial advisor to Campus
Crest and Kilpatrick Townsend &
Stockton LLP is acting as the Company's legal advisor. Raymond James and Associates, Inc. is acting as
Harrison Street's financial advisor
and DLA Piper LLP (US) is acting as legal advisor to Harrison
Street.
About Campus Crest Communities, Inc.
Campus Crest Communities, Inc. is a leading owner and manager of
high-quality student housing properties located close to college
campuses in targeted markets. It has ownership interests in 79
student housing properties with over 42,000 beds across
North America. Additional
information can be found on the Company's website at
http://www.campuscrest.com.
About Harrison Street Real Estate Capital:
Harrison Street Real Estate Capital is a real estate private
equity firm founded in 2005 by real estate veteran Christopher Merrill, Chris Galvin (former Chairman & CEO of
Motorola) & Mike Galvin (former
Assistant Secretary of the U.S. Commerce Department for Export
Administration) that directly and through its affiliates, has
approximately $8 billion in assets
under management (AUM) through commingled funds and public
securities products. The commingled funds focus exclusively on the
Education, Healthcare and Storage segments of the US & European
real estate markets. Since inception, the Firm has acquired or
developed over $10 billion of real
estate throughout 480 properties in 40 states including over 63,000
student housing beds, more than 14,000 senior housing units, over
5.9 million square feet of medical office space, and more than
92,000 self-storage units. For more information please visit
www.harrisonst.com.
Forward-Looking Statements
This communication contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. The forward-looking statements, which include
statements regarding the proposed merger between the Company and
Harrison Street, may be identified
by the inclusion of words such as "expects," "anticipates,"
"intends," "plans," "believes," "seeks," "estimates," "goal" and
variations of such words and other similar expressions, and are
based on current expectations, estimates, assumptions and
projections that are subject to change, and actual results may
differ materially from the forward-looking statements. These
statements, as they relate to the Company or Harrison Street, the management of either such
company or the proposed merger, involve risks and uncertainties
that may cause results to differ materially from those set forth in
the statements. The Company intends that such forward-looking
statements be subject to the safe-harbor provided by the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the Company's actual results, performance or
achievements or industry results to be materially different from
any future results, performance or achievements expressed or
implied by such forward-looking statements. Many factors, including
the following, could cause actual results to differ materially from
the forward-looking statements: the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement or the purchase agreement for
the Montreal Sale; the outcome of any legal proceedings that may be
instituted against the Company and others following announcement of
the merger agreement; the inability to complete the proposed merger
due to the failure to satisfy the conditions to the merger,
including obtaining the approval of the Company's shareholders,
lender consents and other closing conditions more fully described
in the merger agreement; risks that the proposed merger disrupts
current plans and operations of the Company; potential difficulties
in employee retention as a result of the proposed merger; the value
of any CVRs which may be issued in connection with the merger;
legislative, regulatory and economic developments; risks related to
disruption of management's attention from the Company's ongoing
business operations due to the proposed merger; the effect of the
announcement of the proposed merger on the Company's relationships
with colleges and universities, relationships with tenants,
operating results and business generally, and other risks and
uncertainties described under "Item 1A. Risk Factors" in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2014 and in the
Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 2015 and June 30, 2015 and in other documents filed with
the Securities and Exchange Commission ("SEC") by the
Company. Given these uncertainties, current and prospective
investors should be cautioned in their reliance on such
forward-looking statements. Except as required by law, the Company
disclaims any obligation to update any such factors or to publicly
announce the results of any revision to any of the forward-looking
statements contained herein to reflect future events or
developments. A more comprehensive discussion of risks,
uncertainties, financial reporting restatements, and
forward-looking statements may be seen in the Company's Annual
Report on Form 10-K and other periodic filings with the SEC.
Additional Information and Where to Find It
A full description of the terms of the merger and the merger
agreement will be provided in the proxy statement that Campus Crest
intends to file with the SEC to be used at its special meeting of
shareholders in lieu of an annual meeting to approve the proposed
transaction with Harrison
Street. SHAREHOLDERS ARE ADVISED TO READ, WHEN
AVAILABLE, CAMPUS CREST'S PRELIMINARY PROXY STATEMENT AND
DEFINITIVE PROXY STATEMENT IN CONNECTION WITH THE
SOLICITATION OF PROXIES FOR THE SPECIAL MEETING BECAUSE THESE
STATEMENTS WILL CONTAIN IMPORTANT INFORMATION. The definitive
proxy statement will be mailed to shareholders as of a record date
to be established for voting on the proposed merger. Shareholders
will also be able to obtain a copy of the proxy statement, without
charge, by directing a request to: Campus Crest, Investor
Relations, 2100 Rexford Road, Suite 400, Charlotte, NC 28211, or at its website,
www.campuscrest.com. The preliminary proxy statement and
definitive proxy statement, once available, can also be obtained,
without charge, at the SEC's internet site
(http://www.sec.gov).
Participants in Solicitation
The directors, executive officers and certain other members of
management and employees of the Company may be deemed
"participants" in the solicitation of proxies from shareholders of
the Company in favor of the proposed merger. Information
regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of the shareholders of
the Company in connection with the proposed Merger will be set
forth in the proxy statement and the other relevant documents to be
filed with the SEC. You can find information about the
Company's executive officers and directors in its Annual Report on
Form 10-K for the fiscal year ended December
31, 2014 (the "Form 10-K") as filed with the SEC on
April 1, 2015 and Amendment No. 1 to
the Form 10-K as filed with the SEC on August 25, 2015.
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SOURCE Campus Crest Communities, Inc.