This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

NorthStar Realty Finance Announces Plan To Spin-off Asset Management Business Into A Separate Publicly Traded Company In A Tax-free Transaction

NEW YORK, 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, David Hamamoto 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 $90 million, (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:

  • 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).

Investor Information and Conference Call

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, at 10:00 a.m. Eastern time. The call will be webcast live over the Internet from NorthStar's website, www.nrfc.com, 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.

Advisors

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. 

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,097.38 -105.99 -0.58%
S&P 500 2,096.31 -11.47 -0.54%
NASDAQ 4,961.6430 -18.2580 -0.37%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs