RMR Mortgage Trust (Nasdaq: RMRM) and Tremont Mortgage Trust (Nasdaq: TRMT) these days added that they’ve entered proper right into a definitive merger settlement pursuant to which TRMT will merge with and into RMRM, with RMRM persevering with because the surviving enterprise. The merger is predicted to create a greater different business mortgage actual property funding recollect, or REIT, focused on center market transitional bridge loans with assets anticipated to method $1 billion whilst truely invested. The merger is expected to be accretive to distributable earnings in 2022 with the ability to apprehend annual fee financial savings of $1.4 million to $1.6 million, or $0.10 to $0.7 steady with commonplace share, due to the elimination of nice duplicative public agency costs.
Tom Lorenzini, President of RMRM and TRMT, made the following statement:
“We are excited to announce this merger of fantastically complementary companies so that it will create a larger, greater various business mortgage REIT. This combination considerably enhances our financial strength and affords attractive benefits to the shareholders of each organizations. We agree with that with elevated scale and an prolonged capital base the blended commercial enterprise business enterprise is probably plenty higher located to get entry to capital markets, increase running performance, and supply extra attractive danger-adjusted returns for our shareholders.”
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Certain Expected Strategic Transaction Benefits
- Enhanced scale with simply invested belongings anticipated to technique $1 billion
- Accretive to the distributable profits of each RMRM and TRMT
- Expanded capital base, glide and shareholder liquidity
- Improved access to capital markets with the capability of a discounted price of capital
- Increased portfolio diversification amongst investments and asset class exposure
- Greater marketplace visibility to pressure extended transaction extent
- Seamless integration, as modern-day senior manage employer remains in area
Under the phrases of the merger settlement, every TRMT not unusual percentage could be transformed into zero.520 of 1 newly issued RMRM not unusual percentage. Based on the last expenses of RMRM’s and TRMT’s not unusual shares on Friday, April 23, 2021, the implied provide fee is ready $6.Fifty 5 constant with TRMT not unusual proportion, which represents a top beauty of 6% and nine% to the final price and the extent weighted average fee, respectively, for the 30 searching for and promoting days finishing on April 23, 2021. Upon the very last of the merger, RMRM shareholders are expected to very very very own about 70% of the combined agency’s super not unusual stocks, at the same time as TRMT shareholders are anticipated to private approximately 30% of the combined business enterprise organisation’s awesome not unusual shares.
The merger and unique transactions contemplated by using the usage of the usage of way of the merger settlement and the phrases thereof had been evaluated, negotiated and recommended, as applicable to every of RMRM’s and TRMT’s board of trustees via the use of unique committees of every of RMRM’s and TRMT’s board of trustees, respectively, every comprised virtually of RMRM’s and TRMT’s disinterested, unbiased trustees, respectively, and had been one after the opposite unanimously legal and observed thru the use of RMRM’s and TRMT’s independent trustees and with the resource of RMRM’s and TRMT’s board of trustees, with unbiased trustees unanimously approving the merger and distinctive transactions pondered by way of way of the merger agreement.
The merger is anticipated to close all through the 1/3 place of 2021, trouble to the considered necessary approvals through RMRM and TRMT shareholders and special fashionable very last situations. RMRM’s greater than 5% shareholder has agreed to vote in choose of the issuance of not unusual stocks inside the merger at RMRM’s unique meeting of shareholders. TRMT’s extra than 5% shareholder has agreed to vote in pick out of the merger and exclusive transactions pondered through way of the merger settlement at TRMT’s particular assembly of shareholders.
UBS Investment Bank is appearing as top notch financial adviser to the RMRM special committee and Skadden, Arps, Slate, Meagher & Flom LLP is performing as prison representative to RMRM (acting thru the unique committee). Citigroup Global Markets Inc. Is performing as remarkable financial adviser to the TRMT particular committee and Sullivan & Worcester LLP is appearing as criminal adviser to TRMT (appearing via the special committee).