Blackstone Real Estate Completes Privatization of Tricon

Blackstone (NYSE: BX) and Tricon Residential Inc. (NYSE: TCN, TSX: TCN) announced the closing of the statutory plan of arrangement under the Ontario Business Corporations Act, under which Blackstone Real Estate Partners X and Blackstone Real Estate Income Trust acquired all outstanding Tricon common shares for $11.25 per share in cash. The total equity transaction value was $3.5 billion. According to the release, the consideration represents approximately C$15.46 per share based on the Bank of Canada CAD-USD rate published on April 30, 2024. BREIT, which made an initial $240 million exchangeable preferred equity investment in Tricon in 2020, entered into a support agreement to vote its shares in favor of the transaction and will maintain its roughly 11.6% ownership stake.

The per-share consideration consisted of a return of capital distribution of approximately $3.10 per share, about 28% of the total, paid before closing, and a Common Share Acquisition Price of $8.15. Following closing, Creedence Acquisition ULC, a special purpose vehicle formed by BREP X, owns 100% of the common shares, and Tricon is now a wholly owned subsidiary of the purchaser, with BREIT retaining an indirect interest. Tax considerations are discussed in the management information circular dated February 15, 2024.

Tricon's common shares are expected to be delisted from the NYSE at the opening of trading on May 2, 2024, and from the TSX at the close of trading that day. Tricon anticipates ceasing to be a reporting issuer under Canadian securities laws and deregistering under the U.S. Securities Exchange Act of 1934. Registered shareholders were directed to TSX Trust, the transfer agent and depositary, for letter of transmittal questions, while beneficial holders must work through their intermediaries.

Tricon CEO Gary Berman said the transaction "marks an exciting new chapter" for the company, citing capital to grow its Canadian multi-family development platform in Toronto. Nadeem Meghji, Global Co-Head of Blackstone Real Estate, said Blackstone looks forward to delivering additional apartment supply in Canada and single-family supply in the U.S. Blackstone stated its commitment to Tricon's development platform, including a $1 billion pipeline of new U.S. single-family homes, a $2.5 billion pipeline of new Canadian apartments, and an additional $1 billion of capital projects to improve existing U.S. single-family homes.

Tricon, which owns and operates approximately 38,000 single-family rental homes in the U.S. Sun Belt and multi-family apartments in Toronto, was advised by Morgan Stanley and RBC Capital Markets, with Scotiabank serving as independent financial advisor and valuator to the special committee. Blackstone was advised by BofA Securities, Wells Fargo, Deutsche Bank Securities, J.P. Morgan, PJT Partners, TD Securities, and Desjardins Capital Markets.