American Homes 4 Rent Acquires Beazer Pre-Owned Rental Homes, Inc.
Beazer Homes USA, Inc. (NYSE:BZH) announced today that Beazer Pre-Owned Rental Homes, Inc. (“BPRH”), a real estate investment trust in which the Company held an approximate 15% equity interest, has been acquired by American Homes 4 Rent (NYSE:AMH). As a result of this transaction, Beazer Homes will receive Class A common stock of AMH.
Beazer Homes began acquiring and leasing previously-owned homes in 2011. In 2012, the Company formed BPRH and contributed its pre-owned home inventory, consisting of nearly 200 single-family homes, at cost, and raised more than $100 million from an investor group led and arranged by KKR Capital Markets LLC. Since that time, BPRH grew to more than 1,300 homes.
“We are pleased to have joined forces with American Homes 4 Rent, and become shareholders in the single family rental homes’ industry leader,” said Allan Merrill, President and Chief Executive Officer of Beazer Homes. “I am very proud of the efforts of our team, which in just a few years, created a company with a high quality portfolio of homes, best-in-class technology and generated industry leading metrics in occupancy, rental growth, renewal rates and portfolio appreciation.”
Headquartered in Atlanta, Beazer Homes is one of the country’s 10 largest single-family homebuilders. The Company’s homes meet or exceed the benchmark for energy efficient home construction as established by ENERGY STAR® and are designed with Choice Plans, which provide flexible floorplan options to meet the personal preferences and lifestyles of its buyers. In addition, the Company is committed to providing a range of preferred lender choices to facilitate transparent competition between lenders and enhanced customer service. The Company offers homes in 16 states, including Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol “BZH.”
“We are pleased to add these well-located, high-quality homes to our portfolio,” said David P. Singelyn, Chief Executive Officer of the Company. “We expect to move quickly to seamlessly integrate these operations and realize the resulting synergies as we continue to grow our business.”
The acquisition was completed through a tax-free merger of Beazer Rental Homes with a newly formed merger subsidiary of the Company. The merger consideration consisted of approximately 8.2 million AMH common shares (subject to adjustment based on reconciliation of the closing working capital acquired) plus up to $5.0 million cash held in an indemnification escrow. In addition, following the acquisition, the Company assumed and repaid certain liabilities of Beazer Rental Homes, including approximately $112.8 million outstanding under Beazer Rental Homes’ credit agreement.
The issuance of the AMH common shares was made in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof. The Company has agreed to file a registration statement relating to the resale of the AMH common shares issued in connection with the merger no later than August 15, 2014 and, subject to certain exceptions, to cause the registration statement to remain effective until the earlier of the date all the shares have been resold pursuant to the registration statement, the shares are eligible to be freely sold pursuant to Rule 144(b)(1) or one year after the closing.