Colony Capital to Merge With NorthStar

Willkie represents Colony Capital, Inc. in its $17 billion merger of equals with NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp. to create Colony NorthStar, Inc., with $58 billion of assets under management.

On June 3, it was announced that Willkie client Colony Capital, Inc. (NYSE: CLNY), NorthStar Asset Management Group Inc. (NYSE: NSAM) and NorthStar Realty Finance Corp. (NYSE: NRF) have entered into a $17 billion definitive merger agreement under which the companies will combine in an all-stock merger of equals transaction with $58 billion of assets under management. The combined company will be called “Colony NorthStar, Inc.”

The combination creates a world-class, internally-managed, diversified real estate and investment management platform.  Upon completion of the transaction, NSAM shareholders will own approximately 32.85%, Colony shareholders will own approximately 33.25% and NRF shareholders will own approximately 33.90% of the combined company on a fully diluted basis.  The merger is expected to provide greater potential to enhance shareholder returns through overlay of investment management economics across a larger balance sheet.

Los Angeles-based Colony Capital (formerly Colony Financial, Inc.) is a leading global real estate and investment management firm with more than 300 employees across 14 offices in 10 countries. Through Colony’s global investment management business, which has operated under the Colony Capital brand for more than 25 years, Colony has sponsored $24 billion of equity across a variety of distinct funds and investment vehicles that collectively invested over $60 billion of total capital. In 2014, Willkie represented Colony in its $1.6 billion acquisition of Cobalt Capital Industrial Real Estate and as an equity investor in the $9 billion merger of Safeway and Albertsons.

NorthStar Realty Finance is a diversified commercial real estate company that is organized as a REIT and is managed by an affiliate of NorthStar Asset Management Group Inc., a global asset management firm. NRF’s core business activities include acquiring commercial real estate properties, such as healthcare, hotels, manufactured housing communities, office and retail net lease and multifamily properties.

The deal was handled by a large multidisciplinary Willkie team led by partners Thomas Cerabino and Adam Turteltaub (corporate), Thomas Henry (real estate), Michael Brandt (corporate), Henry Cohn (tax) and Michael Katz (executive compensation and benefits).