Starwood Waypoint Residential Trust said it agreed to merge with Colony American Homes, a provider of single family residences for rent, in an all-stock deal.
Starwood Waypoint will issue 64.9 million of its shares for all outstanding shares of Colony American. This values Colony American at about $1.48 billion, based on Starwood Waypoint's Friday close of $22.75.
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The combined company is expected to have an asset value of $7.7 billion, and own and manage over 30,000 homes, the companies said in a joint statement.
Colony American shareholders will own about 59 percent of the combined company, with Starwood Waypoint shareholders holding the rest.
The merger is expected to achieve cost synergies of about $40 million-$50 million, the companies said.
Colony American Chief Operating Officer Fred Tuomi will be the chief executive of the combined company, while Chief Financial Officer Arik Prawer will be the CFO.
Starwood Waypoint CEO Doug Brien will serve as the chief operating officer and president of the new company.
The deal is expected to close in the first quarter of 2016.
Moelis & Co and Sidley Austin LLP were Starwood Waypoint's advisers for the deal.
Colony American was advised by Morgan Stanley & Co LLC, Clifford Chance US LLP and Skadden, Arps, Slate, Meagher & Flom LLP.
(Reporting by Kirti Pandey)