Blackstone Real Estate announced an arrangement agreement to acquire Tricon Residential, taking the company private. As part of the agreement, Blackstone Real Estate Partners X, together with Blackstone Real Estate Income Trust, will acquire all outstanding common shares of Tricon for $11.25 per share.

The transaction price represents a premium of 30% to Tricon’s closing share price on the New York Stock Exchange on Jan. 18. The purchase equates to a $3.5 billion equity transaction value based on fully diluted shares outstanding. Blackstone Real Estate Income Trust will maintain its 11% ownership stake post-closing.

Tricon provides rental homes and apartments in high-growth markets, including Atlanta; Charlotte, North Carolina; Dallas; Phoenix; and Tampa, Florida, as well as Toronto. Tricon has a single-family rental development platform with approximately 2,500 houses under development as well as numerous land development projects that can support the future development of approximately 21,000 single-family homes, according to the company. The company has a Canadian multifamily development platform that is building nearly 5,500 market-rate and affordable multifamily rental apartments.

“We are proud of the significant and immediate value this transaction will deliver to our shareholders, while allowing us to continue providing an exceptional rental experience for our residents,” says Tricon president and CEO Gary Berman. “Blackstone shares our values and our unwavering commitment to resident satisfaction, and we look forward to benefiting from their expertise and capital as we partner in building thriving communities.”

Under Blackstone’s ownership, Tricon plans to complete its $1 billion development pipeline of new single-family rental homes in the United States and $2.5 billion of new apartments in Canada.

“Tricon provides access to high-quality housing, and we are fully committed to delivering an exceptional resident experience together,” says Nadeem Meghji, global co-head of Blackstone Real Estate. “We are excited that our capital will propel Tricon’s efforts to add much-needed housing supply across the U.S. and in Toronto.”

The transaction is structured as a statutory plan of arrangement under the Business Corporations Act. Completion of the deal, which is expected to occur in the second quarter of 2024, is subject to customary closing conditions, including court approval, the approval of Tricon shareholders, and regulatory approval under the Canadian Competition Act and Investment Canada Act.

Morgan Stanley & Co. and RBC Capital Markets are acting as financial advisers to Tricon, and Scotiabank is acting as an independent financial adviser. Goodmans LLP and Paul, Weiss, Rifkind, Wharton & Garrison are acting as legal counsel to Tricon.

BofA Securities, Deutsche Bank Securities, J.P. Morgan Securities, and Wells Fargo are acting as Blackstone’s financial advisers, and Simpson Thacher & Bartlett and Davies Ward Phillips & Vineberg are acting as legal counsel.