NEW YORK CITY AND AUSTIN, TEXAS — Blackstone Inc. (NYSE: BX) has agreed to acquire American Campus Communities (NYSE: ACC) in a deal valued at $12.8 billion, including the assumption of debt. ACC is the largest publicly traded owner, manager and developer of student housing in the United States.
Blackstone plans to take the company private through Blackstone Real Estate Income Trust Inc. and Blackstone Property Partners, which unlike its traditional private-equity funds can hold properties as long-term investments, according to media sources. This move comes as the price of public equity has been more expensive than private institutional capital over the past few years, according to Bill Bayless, co-founder and CEO of ACC, in a letter to employees. During that time, many of the private players in the sector were able to acquire and develop more aggressively than the cost of public equities permitted.
The purchase price represents a premium of 22 percent against ACC’s 90-day, volume-weighted average share price as of April 18, and a 30 percent premium over the company’s closing stock price on Feb. 16, the day prior to ACC disclosing an indication of willingness from Blackstone to acquire the Austin-based firm.
This transaction marks Blackstone’s largest investment in the student housing industry to date, following its joint venture partnership with Landmark Properties — another major developer in the student housing sector — announced in August 2021, which included the acquisition and recapitalization of eight properties valued at $784 million. In February, New York City-based Blackstone acquired four student housing communities and in 2020 the firm acquired U.K.-based student housing firm iQ Student Accommodation for $6 billion.
ACC’s portfolio comprises 166 owned properties totaling 111,900 beds in 71 university markets, including Arizona State University, The University of Texas at Austin, Florida State University and the University of California, Berkeley. The majority of the company’s communities are located within walking distance of their respective university campuses, with 24 percent of ACC’s portfolio located on campus. The company’s total managed portfolio consists of 203 properties featuring 140,900 beds.
The acquisition has been unanimously approved by ACC’s board of directors and the independent special committee of ACC’s board, and is expected to close during the third quarter of 2022 subject to approval by shareholders and other customary closing conditions.
“This transaction delivers compelling, immediate and certain value to our shareholders while positioning ACC to further expand our competitive advantage as we continue in our quest to lead the student housing industry to new heights,” says Bayless.
“Blackstone’s expertise, resources and consistent access to capital will allow us to rapidly leverage our platform and core competencies to entrepreneurially grow our core business and to pursue additional innovative opportunities. Moving forward together, the combined synergies of our organizations will enable us to better serve our current and future residents and university partners,” he continues.
As a condition of the transaction, ACC has agreed to suspend payment of its quarterly dividend effective immediately. BofA Securities is serving as ACC’s lead financial advisor alongside KeyBanc Capital Markets Inc., and Dentons US LLP is serving as the company’s legal counsel.
Wells Fargo Securities LLC, J.P. Morgan Securities LLC and TSB Capital Advisors are serving as Blackstone’s financial advisors, and Simpson Thacher & Bartlett LLP is acting as Blackstone’s legal counsel.
Blackstone is a global leader in real estate investment with $279 billion of investor capital under management in the U.S. The company is one of the largest owners of commercial real estate globally, owning and operating assets across all sectors including residential, office, hospitality, retail and logistics.
ACC’s stock price closed at $57.58 per share on Monday, April 18, up from $42.66 on April 19, 2021. Blackstone’s stock price closed at $111.99 per share on April 18, up from $76.65 on April 19, 2021.