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Sept. 27, 2012 /PRNewswire/ -- Capital Trust, Inc. (NYSE: CT) ("
Capital Trust") today announced a definitive agreement under which an affiliate of Blackstone (NYSE: BX) will acquire its investment management business, operated through its subsidiary, CT Investment Management Co., LLC ("
Under the terms of the agreement, Blackstone will acquire CTIMCO and its fund co-investments for
$20 million. Blackstone will also manage Capital Trust and purchase an 18.2% equity stake in the company. Following the closing, CTIMCO will be integrated into Blackstone's Real Estate Debt Strategies ("
In conjunction with the transaction, Capital Trust will declare a
$2.00 per share special cash dividend, which will be payable as soon as practicable following closing to shareholders of record entitled to vote at a special meeting of shareholders that will be called to approve the transaction. The sources of funds for the special dividend will be cash on hand prior to the transaction and the proceeds from the sale of CTIMCO and related fund co-investments.
Simultaneously with its acquisition of CTIMCO, Blackstone will purchase five million shares of newly issued Capital Trust common stock at a price of
$2.00 per share. Blackstone will not receive the special dividend given that its investment in Capital Trust's common stock will close after the record date. The transaction equates to a
$4.00 per share valuation for Capital Trust (versus the 60-day trailing average share price of
$3.05 as of
September 26, 2012), based upon the
$2.00 per share post-dividend issue price to Blackstone and the
$2.00 per share special dividend.
Stephen Plavin, CEO of Capital Trust, commented: "We believe that Blackstone — with its unparalleled presence in the commercial real estate marketplace — is the ideal management platform for CTIMCO's commercial real estate debt businesses and that the combination of two market leaders will create a platform extremely well positioned for growth. This is an excellent result for Capital Trust's shareholders, CTIMCO and its limited partner investors."
Michael Nash, Senior Managing Director & Chief Investment Officer of BREDS, said: "This transaction will create substantial value for Capital Trust's shareholders while expanding BREDS' asset management and servicing capabilities and augmenting our industry leading commercial real estate debt platform."
Upon completion of the transaction, Capital Trust will enter into a management agreement with an affiliate of Blackstone that will manage Capital Trust pursuant to investment guidelines and policies approved by Capital Trust's board of directors. Stephen Plavin,
Geoffrey Jervis and
Thomas Ruffing will continue to serve in their current executive management roles post transaction. Capital Trust's board of directors has approved the definitive agreement and the transaction contemplated therein, which are subject to customary closing conditions, including, the affirmative vote of the holders of a majority of the outstanding shares of common stock.
W. R. Berkley and its affiliated entities, holders of approximately 17.1% of Capital Trust's common stock, have entered into a voting agreement to support the transaction. Members of Capital Trust's board of directors and executive management and associated shareholders, holders of approximately 9.0% of Capital Trust's common stock, have also indicated their support for the transaction as shareholders. Following the transaction, Capital Trust will continue to own its interests in CT Legacy REIT, the incentive management fee interests in CT Opportunity Partners I, as well as its retained subordinate interests in three Capital Trust sponsored CDOs.
Evercore Partners served as financial advisor to Capital Trust and its independent special committee throughout the strategic alternatives review process and has issued a fairness opinion. Paul Hastings LLP and special counsels, Skadden, Arps, Slate, Meagher & Flom LLP and Venable LLP, represented Capital Trust in the transaction. Blackstone was represented by Simpson Thacher & Bartlett LLP and special counsel Miles & Stockbridge P.C.