Capital Trust, Inc. (CT) announced a definitive agreement under which an affiliate of Blackstone (BX) will acquire its investment management business, operated through its subsidiary, CT Investment Management Co., LLC or "CTIMCO".
Under the terms of the agreement, Blackstone will acquire CTIMCO and its fund co-investments for $20 million. Blackstone will also manage Capital Trust and purchase an 18.2% equity stake in the company. Following the closing, CTIMCO will be integrated into Blackstone's Real Estate Debt Strategies or "BREDS" business.
In conjunction with the transaction, Capital Trust will declare a $2.00 per share special cash dividend, which will be payable as soon as practicable following closing to shareholders of record entitled to vote at a special meeting of shareholders that will be called to approve the transaction. The sources of funds for the special dividend will be cash on hand prior to the transaction and the proceeds from the sale of CTIMCO and related fund co-investments.
Simultaneously with its acquisition of CTIMCO, Blackstone will purchase five million shares of newly issued Capital Trust common stock at a price of $2.00 per share.
Blackstone will not receive the special dividend given that its investment in Capital Trust's common stock will close after the record date. The transaction equates to a $4.00 per share valuation for Capital Trust, based upon the $2.00 per share post-dividend issue price to Blackstone and the $2.00 per share special dividend.
Upon completion of the transaction, Capital Trust will enter into a management agreement with an affiliate of Blackstone that will manage Capital Trust pursuant to investment guidelines and policies approved by Capital Trust's board of directors. Stephen Plavin, Geoffrey Jervis and Thomas Ruffing will continue to serve in their current executive management roles post transaction.
Capital Trust said its board has approved the definitive agreement and the transaction contemplated therein, which are subject to customary closing conditions, including, the affirmative vote of the holders of a majority of the outstanding shares of common stock.
For comments and feedback: editorial@rttnews.com