RAIT FinancialTrust has agreed to sell Independence Realty Advisors LLC, the external adviserof Independence Realty TrustInc., and certain assets of its subsidiary Jupiter Communities LLCto Independence Realty Trust for $43 million.
The transaction will allow Independence Realty Trust tointernalize its adviser and property management functions. The transaction isexpected to close on or before Dec. 31, subject to customary closing conditionsand adjustments including the successful underwritten offering by IndependenceRealty Trust of at least $83 million of its stock.
RAIT Financial President Scott Davidson will become its CEOand a member of the board of trustees of the company, effective upon theclosing of the transaction. RAIT Financial CEO and Chairman Scott Schaefferwill become the chairman and CEO of Independence Realty Trust. Schaeffer willserve as a consultant to RAIT Financial for the 12 months following the closingto assist in the transition. RAIT Financial's board plans to elect a newindependent chairman to succeed Schaeffer.
RAIT Financial CFO James Sebra will continue in his positionuntil the later to occur of March 31, 2017, or the filing of RAIT Financial'sForm 10-K for the fiscal year ending Dec. 31, after which he will become theCFO of Independence Realty Trust. More than 400 employees of RAIT Financial areexpected to join Independence Realty Trust.
In addition, Independence Realty Trust has agreed torepurchase 7.3 million of its common shares owned by certain of RAITFinancial's subsidiaries. The transaction is expected to close within one month.
RAIT Financial expects total proceeds of about $120 million,before fees and expenses, from both transactions, based on the market price ofIndependence Realty Trust's common stock as of Sept. 23.
UBS Investment Bank is serving as exclusive financialadviser, and Ballard Spahr LLP is serving as legal counsel to RAIT Financial.Citigroup Global Markets Inc. is serving as exclusive financial adviser, whileHogan Lovells is serving as legal counsel to Independence Realty Trust.