American Campus Communities to Acquire GMH Communities Trust
American Campus Communities, Inc. (NYSE: ACC), one of the nation’s
largest developers, owners and managers of high-quality student housing
properties, today announced that it has entered into a definitive merger
agreement pursuant to which American Campus Communities will acquire GMH
Communities Trust (NYSE: GCT) for approximately $1.4 billion including
outstanding debt totaling approximately $963 million. This transaction
relates solely to GMH’s student housing
business and not its military housing business, which will be sold in a
separate transaction to a U.S. subsidiary of Balfour Beatty plc.
The transaction has been unanimously approved by the ACC board of
directors and is expected to close in the second quarter of 2008. It is
subject to certain closing conditions, including approval of the merger
by GMH Communities’ shareholders and
completion by GMH of the sale of its military housing division.
Completion of the transaction is not subject to financing and does not
require approval by American Campus Communities’
stockholders. Upon closing, GMH stockholders will own approximately 15.7
percent of ACC’s outstanding equity.
Bill Bayless, CEO of American Campus Communities commented, “We
have strategically positioned the company and our balance sheet to take
advantage of value added acquisitions in this challenging economic
environment. The acquisition of GCT’s student
housing business provides us a significant opportunity for accretion in
asset value, efficiencies in general and administrative cost, the
ability to self fund a portion of our owned development pipeline via
strategic dispositions, and entry into 41 new collegiate markets,
creating opportunities for growth in each of our business segments. We
look forward to welcoming GCT’s field
employees who are joining the ACC family. Their continued hard work
coupled with our premier operating platform should provide the
opportunity for significant value creation.”
Under the terms of the merger agreement, each common share of GMH and
each unit of GMH’s Operating Partnership will
be entitled to receive at the closing of the merger (i) 0.07642 of a
share of ACC common stock and (ii) $3.36 in cash, or approximately $5.53
in value based on the closing price of ACC’s
shares of common stock on February 11, 2008. The amounts paid to the GMH
Communities’ common shareholders and
operating partnership unit holders by American Campus Communities will
be in addition to the amounts payable to GMH Communities’
equity holders from the sale of the military housing division to Balfour
Beatty and the Disposition Assets described below. Pending the closing
of the merger, GMH will pay its regular quarterly dividend, but only for
the quarter ending March 31, 2008.
The merger includes the acquisition of 64 wholly owned student housing
properties as well as a minority interest in eight properties held in
two existing joint ventures. GMH Communities will have the right, but
not the obligation, to sell 10 designated assets (the “Disposition
Assets”) prior to closing.
The merger agreement also calls for Joseph M. Macchione, GMH Communities’
Executive Vice President and General Counsel, to join the American
Campus board following the merger.
American Campus Communities has also entered into an agreement with
Fidelity Real Estate Group pursuant to which American Campus and
Fidelity Real Estate Group, on behalf of an institutional fund, will
form a joint venture and transfer 15 GMH student housing properties to
the venture with an estimated value of $326 million. American Campus
will provide property management services for the properties and retain
a minority interest in the venture. Completion of the joint venture is
subject to the closing of the merger and certain other closing
conditions. American Campus will use the proceeds from this transaction
to fund a portion of the cash consideration to be paid in the merger.
KeyBank National Association has provided a commitment for a $200
million term loan that will be used to fund the remaining portion of the
cash consideration.
After the completion of the transactions, based on current property
ownership, American Campus will own 83 student housing communities
containing approximately 51,600 beds, have a joint venture interest in
23 properties totaling approximately 13,200 beds (including eight
properties held by GMH in existing joint ventures), and provide
third-party management of 26,600 beds. Combined, the company will manage
144 properties consisting of 91,400 beds.
Merrill Lynch & Co. acted as exclusive financial advisor to American
Campus. Locke Lord Bissell & Liddell LLP served as legal counsel to the
company.
Conference Call
The company will hold an investor conference call to discuss the
transaction on Tuesday, February 12, 2008 at 1 p.m. ET (12 p.m. CT). To
participate by telephone, call 800.659.2037 passcode 32791522 at least
five minutes prior to the call.
To listen to the live broadcast, go to www.americancampuscommunities.com
or www.studenthousing.com at
least 15 minutes prior to the call so that required audio software can
be downloaded. Informational slides package can be accessed via the
website.
About American Campus Communities
American Campus Communities, Inc. is one of the largest developers,
owners and managers of high-quality student housing communities in the
United States. The company is a fully integrated, self-managed and
self-administered equity real estate investment trust (REIT) with
expertise in the design, finance, development, construction management,
leasing and management of student housing properties. American Campus
Communities owns and manages a portfolio of 44 student housing
communities containing approximately 28,700 beds. Including its owned
properties, the company provides management and leasing services at a
total of 63 properties with approximately 43,800 beds located on or near
college and university campuses. Additional information is available at www.americancampuscommunities.com.
About Fidelity Real Estate Group
Fidelity Real Estate Group pursues value-added real estate investment
opportunities throughout the U.S. on a fully discretionary basis for its
managed funds. The Real Estate Group is a division of Pyramis Global
Advisors, an affiliate of Fidelity Investments. Fidelity Real Estate
Group manages in excess of $14 billion on behalf of institutional and
individual clients.
Forward-Looking Statements
This news release contains forward-looking statements, which express the
current beliefs and expectations of management. Except for historical
information, the matters discussed in this news release are
forward-looking statements and can be identified by the use of the words “anticipate,”
“believe,” “expect,”
“intend,” “may,”
“might,” “plan,”
“estimate,” “project,”
“should,” “will,”
“result” and
similar expressions. Such statements are based on current expectations
and involve a number of known and unknown risks and uncertainties that
could cause our future results, performance or achievements to differ
significantly from the results, performance or achievements expressed or
implied by such forward-looking statements.
Our actual results could differ materially from those anticipated in
these forward-looking statements as a result of various factors,
including risks and uncertainties related to the proposed transactions
(including but not limited to (i) the occurrence of any effect, event,
development or change that could give rise to the termination of the
definitive agreements, (ii) the inability to complete the proposed
transactions, including in the case of the merger, due to the failure of
GMH’s shareholders to approve the merger,
(iii) the failure of any party to satisfy the conditions to the closing
of the transactions and (iv) the failure of ACC to obtain the necessary
financing arrangements set forth in a commitment letter received in
connection with the proposed merger), inherent in the national economy,
the real estate industry in general, and in our specific markets; the
effect of terrorism or the threat of terrorism; legislative or
regulatory changes including changes to laws governing REITs; our
dependence on key personnel whose continued service is not guaranteed;
availability of qualified acquisition and development targets;
availability of capital and financing; rising interest rates; rising
insurance rates; impact of ad valorem and income taxation; changes in
generally accepted accounting principals; and our continued ability to
successfully lease and operate our properties. While we believe these
forward-looking statements are based on reasonable assumptions, we can
give no assurance that our expectations will be achieved. These
forward-looking statements are made as of the date of this news release,
and we undertake no obligation to update publicly or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
Additional Information about the Merger and Where to Find It
This press release does not constitute an offer of any securities for
sale. In connection with the merger, American Campus Communities, Inc. (“ACC”)
intends to file with the SEC a registration statement on Form S-4, which
will include a proxy statement/prospectus of GMH Communities Trust (“GMH”)
and ACC and other relevant materials in connection with the proposed
transactions. Investors and security holders of ACC and GMH are urged to
read the proxy statement/prospectus and the other relevant material when
they become available because they will contain important information
about ACC, GMH and the proposed transactions. The proxy
statement/prospectus and other relevant materials (when they become
available), and any and all documents filed by ACC or GMH with the SEC,
may be obtained free of charge at the SEC’s
web site at www.sec.gov. Investors and
security holders may obtain free copies of the documents filed with the
SEC by ACC by directing a written request to American Campus
Communities, Inc., 805 Las Cimas Parkway, Suite 400, Austin, Texas 78746
Attention: Investor Relations. In addition, investors and security
holders may obtain free copies of the documents filed with the SEC by
GMH Communities by directing a written request to GMH Communities Trust,
10 Campus Boulevard, Newtown Square, Pennsylvania 19073, Attention:
Investor Relations. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS WHEN THEY
BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH
RESPECT TO THE PROPOSED TRANSACTIONS.
ACC, GMH and their respective executive officers, directors and trustees
may be deemed to be participants in the solicitation of proxies from the
security holders of GMH in connection with the merger. Information about
those executive officers and directors of ACC and their ownership of ACC
common stock is set forth in the proxy statement for ACC’s
2007 Annual Meeting of Stockholders, which was filed with the SEC on
March 29, 2007. Information about the executive officers and trustees of
GMH and their ownership of GMH common shares is set forth in the proxy
statement for GMH’s 2007 Annual Meeting of
Shareholders, which was filed with the SEC on May 8, 2007. Investors and
security holders may obtain additional information regarding the direct
and indirect interests of ACC, GMH and their respective executive
officers, directors and trustees in the merger by reading the proxy
statement and prospectus regarding the merger when they become available.
American Campus Communities, Inc. Investor Relations: Gina
Cowart, 512-732-1000
