Record-Breaking Colony-NorthStar Merger Closes

By Scott Baltic, Contributing Editor

Thomas Barrack Jr.

Los Angeles and New York—Colony NorthStar Inc. has been born, the completion of the merger of Colony Capital Inc., NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. having been announced late Tuesday by the new company. The merger reportedly was the largest CRE merger of 2016.

Colony NorthStar has an equity market capitalization of about $9 billion and assets under management of $58 billion. It manages capital on behalf of its stockholders, institutional and retail investors in private funds and non-traded and traded CRE investment trusts and 1940 Act companies.

The transaction was originally announced on June 3, 2016 and approved by all three companies’ stockholders at their respective special meetings held on Dec. 20, 2016.

Colony NorthStar will trade on the NYSE under the symbol “CLNS” and was added today to the MSCI U.S. REIT Index (RMZ), where it will be in the top quartile by equity market capitalization.

As previously reported, Colony NorthStar is expected to benefit from:

• A seasoned management team with access to proprietary deal sourcing.
• A well-diversified portfolio with concentrations in healthcare, industrial, hospitality and opportunistic equity and debt.
• Wide access to capital sources through the company’s institutional private funds management business, retail capital platforms including non-traded REITs and publicly traded vehicles such as NorthStar Realty Europe Corp.
• About $115 million in annual cost synergies, consisting of about $80 million of cash savings and approximately $35 million of stock-based compensation savings.

Thomas Barrack Jr. is executive chairman of the board, David Hamamoto is executive vice chairman and Richard Saltzman is CEO.

The 10-person board of directors includes eight independent directors. In addition to Barrack and Hamamoto, the board comprises four former directors of Colony, a former director of NSAM and a former director of NRF, as well as two newly elected directors.

The closing “represents a milestone in our collective long-term strategy of building a leading global real estate business focused on a core set of real estate verticals in addition to a top-tier institutional and retail investment management business,” Barrack said in a prepared statement.

Image via Colony Inc.