Dec. 10, 2013
/PRNewswire/ -- NorthStar Realty Finance Corp. (NYSE: NRF) ("NRF") today announced that its Board of Directors unanimously approved a plan to spin-off its asset management business into a separate publicly traded company in the form of a tax-free distribution. The distribution is expected to be completed in the second quarter of 2014 and will be comprised of common stock in NorthStar Asset Management Corp. ("NorthStar Asset Management"), a newly formed company expected to be listed on the New York Stock Exchange.
In connection with the proposed spin-off, NorthStar Asset Management will enter into a 20-year management contract to manage NRF. NorthStar Asset Management will also manage NRF's non-traded REIT business and own its broker-dealer platform.
NorthStar Chairman and Chief Executive Officer,
commented, "We are constantly searching for ways to maximize shareholder value. This transaction represents a fully aligned, long-term opportunity to unlock value for NRF shareholders through the creation of a leading asset-manager. NorthStar Asset Management will have a scalable operating platform with limited capital needs and a proven ability to grow."
Mr. Hamamoto continued, "This unique transaction crystalizes the value of NRF and its platform, and allows our shareholders to be the beneficiaries of a long-term contract to manage a diversified public company, a rapidly growing non-traded REIT platform and a broker-dealer."
NorthStar Asset Management and Management Contract
NorthStar Asset Management will be led by the current NRF management team, which has a proven track record in managing and growing NRF and its non-traded REIT platform. The company's in place, long-duration and high margin revenue streams, together with substantial growth prospects, position it as an industry leading asset manager.
In connection with the proposed spin-off, the 20-year management contract that NorthStar Asset Management will enter into with NRF will provide for (i) an annual base management fee of
, (ii) an additional annual base management fee equal to 1.5% of the cumulative "equity" raised at NRF after
December 10, 2013
, and (iii) incentive fees to be determined as follows:
Investor Information and Conference Call
- 15% incentive fee payable when cash available for distribution at NRF ("CAD") exceeds $0.78 per share (equivalent to a 12% yield on September 30, 2013 adjusted book value of $6.46 per share); and
- 25% incentive fee payable when CAD exceeds $0.90 per share (equivalent to a 14% yield on September 30, 2013 adjusted book value of $6.46 per share).
An investor presentation discussing the proposed transaction is available in the investor relations section of NorthStar's website. NorthStar will hold a conference call to discuss the proposed transaction on
December 11, 2013
10:00 a.m. Eastern time
. The call will be webcast live over the Internet from NorthStar's website,
, and will be archived on the Company's website. The call can also be accessed live over the phone by dialing 800-762-8779, or for international callers, by dialing 480-629-9771.
A replay of the call will be available one hour after the call through
December 18, 2013
by 800-406-7325 or, for international callers, 303-590-3030, using pass code 4655898.
UBS Investment Bank is serving as financial advisor to NorthStar Realty Finance Corp., Sullivan & Cromwell LLP is serving as legal advisor and Kramer, Levin, Naftalis & Frankel LLP and Hunton & Williams LLP are serving as tax advisors to NorthStar Realty Finance Corp.