Colony Starwood Homes, a leading single-family rental real estate investment trust (REIT), today announced the completion of the merger between Starwood Waypoint Residential Trust (SWAY) and Colony American Homes (CAH) and the internalization of SWAY’s manager, forming a combined company with a combined asset value of approximately $7.7 billion.
The merger and the internalization were approved by SWAY’s shareholders at a meeting held on December 17, 2015. In connection with the merger, SWAY has been renamed Colony Starwood Homes and will trade under the ticker symbol "SFR" on the New York Stock Exchange effective January 6, 2016. The Company will maintain its existing “Waypoint Homes” consumer brand.
“This transformative merger establishes Colony Starwood Homes as the premier single-family REIT, with the scale, balance sheet strength and operating capability to seek to deliver industry-leading returns on equity, supported by a stable and growing dividend, to our shareholders in the coming years," said Barry Sternlicht, Co-Chairman of the Company’s Board of Trustees
Thomas J. Barrack, Jr., Co-Chairman of the Board, added, “By combining these two leading organizations, with over 30,000 homes concentrated in our top 10 markets, we expect to unlock the strategic and operational benefits envisioned when we structured this transaction.”
“We have been making significant progress on our integration,” said Fred Tuomi, Chief Executive Officer of Colony Starwood Homes.
Leadership and Organization
Fred Tuomi, formerly President and Chief Operating Officer (“COO”) of CAH, is the CEO of the Company and Arik Prawer, formerly Chief Financial Officer (“CFO”) of CAH, is the CFO of the Company. Charles Young, formerly COO of SWAY, remains as COO of the Company.
Barry Sternlicht, CEO and Chairman of Starwood Capital Group and the former Chairman of SWAY’s board, along with Thomas J. Barrack, Jr., Executive Chairman of Colony Capital and the former Chairman of CAH’s board, are Co-Chairmen of the Board. Richard Bronson, Michael Fascitelli, and Jeffrey Kelter will remain on the Board as independent trustees. Robert Best, Thomas Knapp, John Steffens and J. Ronald Terwilliger, all former directors of CAH, have joined the Board as independent trustees. Thomas Bowers, COO at Starwood Capital Group, Justin Chang, the former CEO of CAH and a former director of CAH, and Richard Saltzman, the former Vice-Chairman of CAH’s board, have also joined the Board.
Anticipated Synergies and Financial Reporting
The Company currently expects to achieve significant identified synergies of approximately $50 million on a normalized annual basis resulting from operating property-level and G&A cost savings and the internalization of SWAY’s manager. The Company now believes that it will achieve 70% of run-rate savings by end of the first quarter 2016 and 100% realized by year-end 2017.
Due to the timing of the closing of the merger on January 5, 2016, the Company’s financial reporting for the fiscal year ended December 31, 2015 will consist of SWAY’s results and will not include CAH’s results for any periods prior to the closing of the merger.