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CCG Announces Amendment To The Purchase And Sale Agreement With Copper Beech

Stocks in this article: CCG

Campus Crest Communities, Inc. (“CCG”) (NYSE:CCG), today announced that it has entered into an amendment to the purchase and sale agreement to acquire Copper Beech Townhome Communities, LLC and affiliates (“Copper Beech”). Highlights of the amendment are as follows:

  • Provides Campus Crest the ability to defer the first purchase option until August 2014
  • Original planned investment of 48% of 37 properties is restructured to enable CCG to acquire 67% of 30 properties and eliminate any CCG ownership in seven lower leased properties
    • CCG has the option, but not the obligation, to purchase interests in the seven properties in the future
    • 30 properties include 28 operating student housing properties, a land parcel and the Copper Beech corporate headquarters
  • Repayment by Copper Beech to CCG of $31.7 million loan originally made in March 2013
    • $16.2 million reinvested into Copper Beech; balance of $15.5 million increases CCG liquidity
  • Accelerates day-to-day management of Copper Beech operations to CCG in 2014 from 2015 if CCG exercises the first option
  • No change in transaction economics, outside of $4 million for consideration for the amendment
    • Debt balance on 30 properties as of June 30, 2013 was approximately $403.5 million

A detailed summary of the amendment follows:

 
Investment Dollars
($mm) Timing

InvestmentDollars

 

DebtPaydown

TotalInvestment

Cumulative DirectEquity Interest

Cash Flow  
 
Stage 1
30 Properties n/a $143.7 (1) $106.7 $250.4 67% $13 preferred & 67% (2)
7 Properties n/a $0.0   $0.0 $0.0 0% 0%  
Total $143.7 $106.7 $250.4 n/a n/a
 
Purchase Option 1
30 Properties

March 18 - August

$93.5 $21.0 $114.5 85% 100%
7 Properties

18, 2014

$16.9   $0.0 $16.9 18% 33%  
Total $110.4 $21.0 $131.4 n/a n/a
 
Purchase Option 2
37 Properties Through March 2015 $100.7 (3) $19.0 $119.7 88.9% 100%
 
Purchase Option 3
37 Properties Through March 2016 $53.4 (4) $0.0 $53.4 100% 100%
                 
Total   $408.2   $146.7 $554.9 100% 100%  
 
(1) Includes $16.2 million of loan repayment proceeds and $4 million as consideration for entering into the amendment
(2) Per original agreement, CCG entitled to first $13 million of cash flow in year 1; per subject amendment, CCG is entitled to 67% of residual cash flow after preferred
(3) Includes $10.7 million originally part of the loan that will be repaid by Copper Beech
(4) Includes $4.8 million originally part of the loan that will be repaid by Copper Beech

Completion of the amendment is subject to receipt of required lender consents. CCG expects to obtain such consents during the fourth quarter of 2013, although there can be no assurance as to the timing.

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