New York City and Austin, Texas — Blackstone Inc. has completed the previously announced acquisition of American Campus Communities (ACC) in a deal valued at $12.8 billion, including the assumption of debt. Austin, Texas-based ACC is the largest publicly traded owner, manager and developer of student housing in the United States.
New York City-based Blackstone will take the company private following the acquisition. This move comes as the price of public equity has been more expensive than private institutional capital over the past few years, according to Bill Bayless, co-founder and CEO of ACC, in a letter to employees. During that time, many of the private players in the sector were able to acquire and develop more aggressively than the cost of public equities permitted.
“We are proud and excited to have our best-in-class company join Blackstone, whose expertise, resources and consistent access to capital will allow us to grow and continue to lead the student housing industry,” says Bayless. “This transaction created significant value for our shareholders and represents the culmination of our team’s passionate and dedicated service to our student residents and university partners.”
The purchase price represents a premium of 22 percent against ACC’s 90-day, volume-weighted average share price as of April 18, and a 30 percent premium over the company’s closing stock price on Feb. 16, the day prior to ACC disclosing an indication of willingness from Blackstone to acquire the firm.
“We are pleased to complete this transaction and welcome the American Campus Communities team to Blackstone,” says Jacob Werner, co-head of Americas acquisitions for Blackstone Real Estate. “Student housing is a compelling sector with strong historical performance and future growth potential driven by increasing enrollment at the top universities in the U.S. as well as a shortage of quality housing supply. Our perpetual capital will enable ACC to invest in its existing assets and create much-needed new housing in university markets.”
BofA Securities served as ACC’s lead financial advisor alongside KeyBanc Capital Markets Inc. Dentons US LLP served as ACC’s legal counsel. Wells Fargo Securities LLC, J.P. Morgan Securities LLC, Citigroup Global Markets Inc., Goldman Sachs, Morgan Stanley & Co. LLC, SMBC, a member of SMBC Group, and TSB Capital Advisors served as Blackstone’s financial advisors. Simpson Thacher & Bartlett LLP acted as Blackstone’s legal counsel.