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Starwood Waypoint Residential to merge with Colony American Homes in $1.48bn deal

Staff writer |
Starwood Waypoint Residential Trust plans to merge with Colony American Homes. The company will issue 64.9 million of its shares for all outstanding Colony American shares.

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This values Colony American at about $1.48 billion, based on Starwood Waypoint's Friday close of $22.75.

Colony American shareholders will own about 59 percent of the combined company, with Starwood Waypoint shareholders holding the rest.

The companies overlap in most U.S. markets they operate in, including California, Arizona, Nevada, Colorado, Texas, Georgia and Florida.

Colony American Chief Operating Officer Fred Tuomi will be CEO of the combined company, while Chief Financial Officer Arik Prawer will be the CFO.

Starwood Waypoint CEO Doug Brien will serve as the chief operating officer and president of the new company.

The merger, which is expected to close in the first quarter, is expected to save about $40 million to $50 million, the companies said.

Starwood Waypoint said the deal would add 23 percent to its core funds from operation per share in 2016 and about 50 percent in 2017.

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