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Starwood Capital Group to Acquire Forestar Group for $605M

Summer Lakes, located in Rosenberg, Texas, is a community within Forestar's portfolio.

Summer Lakes, located in Rosenberg, Texas, is a community within Forestar's portfolio.

GREENWICH, CONN. — Starwood Capital Group has agreed to acquire Forestar Group Inc., a residential and mixed-use real estate development company, for $605 million. Starwood will acquire all of the outstanding shares of Forestar’s common stock for $14.25 per share in cash.

The Forestar Board of Directors has unanimously approved the merger agreement and has recommended approval of the merger by Forestar’s stockholders. The transaction is expected to close in the third quarter of 2017.

“Over the past 18 months Forestar has significantly reduced costs and outstanding debt, exited non-core assets and focused on its core community development business. While executing these key initiatives, the board and management have been evaluating longer term strategic alternatives,” says James Rubright, chairman of the Forestar board. “After conducting a thorough review assisted by highly experienced financial and legal advisors, the board believes that engaging in the transaction with Starwood is the best option to maximize stockholder value.”

JMP Securities LLC is serving as financial advisor to Forestar, while Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor. Kirkland & Ellis LLP is serving as legal advisor to Starwood.

Austin, Texas-based Forestar Group maintains a portfolio of 50 residential and mixed-use projects comprised of approximately 4,600 acres of real estate located in 10 states. The majority of Forestar properties are single-family homes.

Starwood Capital Group, based in Greenwich, Conn., is a private alternative investment firm managing more than $51 billion in assets.

— Kristin Hiller

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