Housing REIT Campus Crest to buy Copper Beech
CHARLOTTE, N.C. (AP) — Campus Crest Communities Inc., a real estate investment trust that operates student housing facilities under The Grove brand, said Wednesday that it will buy a 48 percent stake in Copper Beech Townhome Communities for $262 million, with the option to purchase the rest by mid-2016.
It also said Wednesday that it would issue 22.2 million shares, with an option for underwriters to purchase another 3.3 million shares if there is excess demand. As of Wednesday's share price, the offering would raise up to $312 million to help fund the acquisition.
The acquisition depends on successfully completing the share sale.
Shares of Campus Crest fell 29 cents to $12.24 in midday trading.
Copper Beech is the fifth largest student housing operator in the U.S. with about 16,645 beds. The combined entity would be the nation's second largest student housing operator with a portfolio of nearly 42,000 beds. Campus Crest said the deal would give it a larger footprint and diversify its holdings.
Campus Crest CEO Ted Rollins said in a statement that the acquisition would add to earnings.
The initial investment includes the repayment of $107 million in existing debt and a $32 million loan to existing investors. Campus Crest has the option to acquire the rest of the equity in Copper Beech in stages over 38 months. The total purchase price would be $404 million plus debt repayment of about $147 million.