Blackstone Inc. will purchase American Campus Communities, Inc. (NYSE: ACC) in a $12.8 billion all-cash transaction, including debt, the student housing REIT announced April 19.
Bill Bayless, ACC co-founder and CEO, said the transaction marked the culmination of a “pioneering quest to transform the student housing sector into a mainstream, institutional asset class within the commercial real estate sector.”
The purchase price represents a premium of 22% to the 90-calendar day volume-weighted average share price ending April 18. The transaction is expected to close in the third quarter.
ACC’s portfolio comprises 166 owned properties in 71 leading university markets including Arizona State University, The University of Texas at Austin, Florida State University, and the University of California—Berkeley, among others.
Piper Sandler & Co. Managing Director Alexander Goldfarb commented that “while we certainly were not expecting this deal, it doesn't totally surprise [us] given the Street has long valued the company below net asset value (NAV) versus the ebullient private market that clearly showed the demand for student housing.”
Goldfarb added that ACC “helped transform a mom & pop business from an Animal House image to one that is among the most attractive to institutional investors and universities looking to modernize their 50-plus-year-old dorms.”
Citi analysts said that while they believe that current management was on track to create value through solid internal growth and better capital allocation decisions, “we view the deal as generally positive given the certainty of pricing and execution.”
Capital One Securities said the deal enables ACC to more aggressively pursue growth in acquisitions, but also its on-campus development pipeline.
Jacob Werner, co-head of Americas acquisitions for Blackstone Real Estate, said Blackstone’s perpetual capital will enable ACC to invest in its existing assets and create much-needed new housing in university markets. “We’re excited to work with the ACC team to deliver communities where students love living,” he said.
Bayless noted that the deal delivers “compelling, immediate, and certain value to our shareholders while positioning ACC to further expand our competitive advantage as we continue in our quest to lead the student housing industry to new heights.”
Blackstone’s expertise, resources, and consistent access to capital, Bayless added, will allow ACC to rapidly leverage its platform and core competencies “to entrepreneurially grow our core business and to pursue additional innovative opportunities. Moving forward together, the combined synergies of our organizations will enable us to better serve our current and future residents and university partners.”
ACC noted that Blackstone Core+ perpetual capital vehicles, primarily comprised of Blackstone Real Estate Income Trust, Inc. (BREIT), alongside Blackstone Property Partners, will acquire all outstanding shares of ACC common stock.