MAA (NYSE: MAA) said Aug. 15 it intends to pay approximately $4 billion to acquire Post Properties, Inc., (NYSE:PPS) and create a multifamily REIT with a total market capitalization of around $17 billion.
In a conference call, H. Eric Bolton, Jr., chairman and CEO of MAA, said the combined company would have a broader, more balanced earnings base, with a lower long-term cost of capital. The new company would have a “superior competitive advantage” across the Sunbelt region of the United States, he said.
The merger would create a combined asset base of approximately 105,000 multifamily units in 317 properties. The combined company’s ten largest markets by unit count will be: Atlanta; Dallas; Austin, Texas; Charlotte, North Carolina; Raleigh, North Carolina; Orlando, Florida; Tampa, Florida; Fort Worth, Texas; Houston; and Washington, D.C.
The all-stock merger is expected to close in the fourth quarter. Under the terms of the deal, each share of Post common stock will be converted into 0.71 shares of newly issued MAA common stock. Based on MAA’s closing stock price on Aug. 12 of $102.15, and 53.5 million outstanding Post shares, that values the transaction at about $3.8 billion.
Following the merger, former MAA equity holders will hold approximately 67.7 percent of the combined company’s equity, and former Post equity holders will hold approximately 32.3 percent.