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American Campus Communities, Inc. (NYSE:ACC), the largest owner, manager and developer of high-quality student housing properties in the U.S., today announced that it had substantially completed its due diligence investigation relating to the acquisition of 15 student housing properties with 6,579 beds, including two properties and an additional phase at an existing property currently under development, pursuant to a merger agreement with affiliates of Campus Acquisitions, LLC for $627.0 million. The acquisition consideration consists of the assumption of approximately $231.6 million of outstanding mortgage debt, the issuance of between $15 million and $50 million in the form of units of common limited partnership interest in ACC's operating partnership, and between $345.4 million and $380.4 million in cash, with the final allocation between the unit and cash consideration to be determined by Campus Acquisitions prior to closing.
The transaction is expected to close in the third quarter of 2012 and is subject to certain closing conditions, including obtaining various lender consents. The merger agreement contains provisions pursuant to which Campus Acquisitions can defer the closings of the acquisition of any of the development properties to a date not later than October 15, 2013 if the closing conditions relating to such properties are not satisfied by November 15, 2012. Completion of the transaction is not subject to financing and does not require approval by ACC stockholders. American Campus intends to fund the cash portion of the purchase price with available cash, borrowings under its revolving credit facility, a bridge loan facility and/or the sale of debt or equity securities.
Bill Bayless, CEO of American Campus, commented, “We are very pleased to be adding 15 properties to the ACC portfolio that meet our investment criteria of differentiated communities close to campus in submarkets with barriers to entry. This acquisition should provide us a significant opportunity for meaningful accretion in asset value, operational upside, efficiencies with 11 of the assets located in our existing markets, plus new business prospects with the entry into four new tier one collegiate markets. We believe the highly fragmented student housing industry is ripe for consolidation and we are well positioned to execute on strategic opportunities.”