NorthStar Asset Management Group (NSAM), Colony Capital (Colony) and NorthStar Realty Finance (NRF) have agreed to merge in an all-stock deal, which will create a single real-estate and investment management platform with $58bn in assets.
NSAM shareholders will own about 32.85%, Colony shareholders will own nearly 33.25%, and NRF shareholders will own about 33.90% of the combined entity that will operate under the name Colony NorthStar.
Shareholders of NSAM will also secure a special cash dividend equal to $128m, representing a one-time distribution of excess NSAM taxable earnings and profits.
The companies said that the deal will lead to total annual cost synergies of about $115m, which include about $80m of cash savings and about $35m of stock based compensation savings.
The deal is anticipated to be completed during the first quarter of 2017, subject to shareholders’ and regulatory approvals.
Colony Capital CEO Richard Saltzman will become the CEO of the merged company, Colony Capital founder and chairman Thomas Barrack Jr. will hold the role of executive chairman of the Board of Directors, while NorthStar Realty chairman David Hamamoto will become executive vice chairman.
"The pro forma combined enterprise’s enhanced scale, diversification, and unique platforms will foster the ability to generate substantial return on equity through high quality real estate investments enhanced by attractive investment management revenues. In addition, the merger produces an outstanding partnership of complementary management talent with access to enormous capital and distribution resources for the benefit of our shareholders," Saltzman said.