- Ares Management Corporation (NYSE: ARES) announced a deal to buy Front Yard Residential Corporation (NYSE: RESI) for approximately $2.4 billion. These are the details.
Front Yard Residential Corporation (NYSE: RESI), a leading provider of high-quality and affordable rental homes, announced that it has entered into a definitive merger agreement whereby a partnership led by Pretium and including funds managed by the Real Estate Equity and Alternative Credit strategies of Ares Management Corporation (NYSE: ARES) will acquire Front Yard in a deal valued at approximately $2.4 billion, including debt to be assumed or refinanced.
Under the terms of the agreement, Front Yard stockholders will receive $13.50 in cash per share. The price represents a premium of approximately 35.5% over Front Yard’s closing share price on October 16, 2020, the last trading day prior to today’s announcement and 45.4% over Front Yard’s one-month volume-weighted average share price.
KEY QUOTES:
“We are excited to have reached an agreement with Pretium and Ares Management for the sale of our company, which we believe represents an outstanding, value-maximizing outcome for Front Yard stockholders. Pretium has built an impressive portfolio of single-family rental homes and has developed an industry-leading platform that includes more than 40,000 homes under management. I am confident that the combination of our complementary portfolios, with increased size and scale, operating leverage and efficiencies, will deliver significant benefits to our platform and residents.”
— George Ellison, Front Yard’s Chief Executive Officer
“The Front Yard Board of Directors has always been committed to maximizing value for our stockholders, and we believe this merger accomplishes that objective. This transaction is the result of an extensive and thorough review of strategic alternatives by our Board. Earlier this year we announced a transaction to internalize our asset management function, a change that we believed would best position us to enhance stockholder value going forward. We now are pleased to successfully conclude our process with a transaction that delivers immediate and significant value to our stockholders.”
— Rochelle R. Dobbs, Front Yard’s Chairwoman of the Board of Directors
“This transaction is an important development in the evolution of the single-family rental sector as the asset class continues to perform strongly and attract increasing amounts of institutional investment. Pretium is proud of the role we have played in driving the growth and maturation of the industry, and we look forward to building on that track record with this acquisition. We welcome the Front Yard team to the Pretium family and we, along with our partners at Ares Management, will build on the significant progress they have achieved as we further invest in this business and apply our scale and strategic and operational expertise to deliver benefits for renters, communities, and investors.”
— Don Mullen, Pretium’s Chairman and CEO
