Blackstone has made a deal to acquire American Campus Communities (ACC) in an all-cash transaction for $12.8 billion, including the assumption of debt. The Austin, Texas-based student housing developer, owner, and manager entered into a definitive agreement, under which Blackstone Core+ capital vehicles, primarily Blackstone Real Estate Income Trust (BREIT) alongside Blackstone Property Partners, will purchase all shares of ACC’s common stock for $65.47 per fully diluted share.
The purchase price represents a premium of 30% over the Feb. 16 closing stock price, the date prior to the company disclosing receipt of an indication of willingness to offer to acquire the company, and a 14% premium over the April 18 closing price.
According to Jacob Werner, co-head of Americas acquisitions for Blackstone Real Estate, the company’s perpetual capital will enable the student housing company to invest in its existing portfolio and create needed housing in university markets.
ACC’s portfolio includes 166 owned properties with approximately 111,900 beds in 71 university markets, including Arizona State University, The University of Texas at Austin, Florida State University, and the University of California, Berkeley. The majority of its properties are purpose-built student housing assets within walking distance to campus, with 24% of the communities on campus. ACC’s managed portfolio, including owned and third-party managed, is comprised of 203 properties with approximately 140,900 beds.
“Through our IPO 18 years ago, we began our pioneering quest to transform the student housing sector into a mainstream, institutional asset class within the commercial real estate sector,” said Bill Bayless, ACC co-founder and CEO. “We have certainly accomplished that mission and are proud and excited to have our best-in-class company join Blackstone, the world’s largest alternative asset manager. This announcement represents the culmination of the passion and dedicated service of the ACC team to our student residents and university partners, while creating significant value for our shareholders.”
Bayless added that Blackstone’s expertise, resources, and access to capital will help ACC rapidly leverage its platform and core competencies to grow its business and pursue additional innovative opportunities.
The transaction, which is expected to close in the third quarter subject to approval by ACC’s shareholders and customary closing conditions, has been approved by ACC’s board of directors and the independent special committee of its board.
BofA Securities is serving as ACC’s lead financial adviser. KeyBanc Capital Markets also is acting as a financial adviser, and Dentons US is serving as ACC’s legal counsel. Wells Fargo Securities, JPMorgan Securities, and TSB Capital Advisors are serving as Blackstone’s financial advisers, and Simpson Thacher & Bartlett is the firm’s legal counsel.
Blackstone isn’t a stranger to student housing. In February, a joint venture between Landmark Properties, a fully integrated real estate firm specializing in the development, construction, acquisition, and management of residential living communities, and BREIT announced that it had acquired four student housing properties with 2,248 beds serving Tier 1 universities. In addition, Landmark and BREIT announced a $784 million joint-venture partnership to recapitalize eight student housing assets with 5,416 beds in August.