Two Harbors Investment Corp. (NYSE: TWO; NYSE MKT: TWO.WS) reported that today Silver Bay Realty Trust Corp. (“Silver Bay”) announced the pricing of its initial public offering of 13,250,000 shares of common stock (the “IPO”) and granted the underwriters a 30-day option to purchase up to an additional 1,987,500 shares of common stock to cover over-allotments, if any. The shares are expected to begin trading on the New York Stock Exchange on December 14, 2012 under the symbol “SBY.”
Two Harbors previously announced it entered into an agreement with Silver Bay, pursuant to which it would contribute its existing portfolio of over 2,200 single-family properties to Silver Bay, together with $50 million in cash that would be used to acquire and renovate properties through the closing. In exchange for the contribution, Two Harbors would receive approximately 17.8 million shares of common stock of Silver Bay. The shares received by Two Harbors would be subject to a 90-day lock-up period following the closing of the IPO, after which Two Harbors may, subject to the discretion and approval of its Board of Directors and in compliance with applicable securities laws, hold, sell or otherwise dispose of the shares, which may include a distribution of the shares by means of a special dividend to Two Harbors shareholders. The contribution, which remains subject to various conditions to closing, would close simultaneously with the closing of the IPO.
Silver Bay is a newly organized Maryland corporation focused on the acquisition, renovation, leasing and management of single-family residential properties for rental income and long-term appreciation. Silver Bay will be externally managed by PRCM Real Estate Advisers LLC, a joint venture between an affiliate of Pine River Capital Management L.P. and Provident Real Estate Advisors LLC. An affiliate of Pine River also serves as the external manager of Two Harbors and provides property acquisition and property management services with respect to Two Harbors’ portfolio of single-family rental properties. Entities managed by Provident are also contributing approximately 880 single-family residential properties to Silver Bay as part of the transaction. Upon consummation of the offering and the related transactions, Silver Bay will own more than 3,100 single-family properties located in Arizona, California, Florida, Georgia, Nevada, North Carolina and Texas. Silver Bay intends to elect and qualify to be taxed as a real estate investment trust.