Cousins Properties (CUZ) Announces Merger With TIER REIT
Zacks Investment Research | Mar 25, 2019 09:35PM ET
Cousins Properties Incorporated (NYSE:CUZ) and TIER REIT, Inc. (NYSE:TIER) have announced plans to merge in a 100% stock-for-stock deal that will create a Sun Belt-focused Class A office REIT with total market capitalization of nearly $7.8 billion.
The transaction is anticipated to close in third-quarter 2019.
Merger Considerations
Accordingly, Cousins Properties will issue 2.98 shares of its common stock for every share of Dallas-based TIER. The combined company will have an equity market capitalization of around $5.9 billion. Upon merger completion, pro-forma equity ownership for Cousins and TIER stockholders will be nearly 72% and 28% of the combined stock.
Though the deal has been unanimously approved by the board of directors of both companies, it is subject to customary closing conditions. Also, the approval of both Cousins and TIER stockholders is pending.
After the merger, Cousins Properties will retain its name and ticker and will remain headquartered in Atlanta, GA.
Merger Rationale
The deal is expected to create synergies by reducing duplicative costs in markets where both companies have an overlapping presence. Specifically, annual net G&A savings of nearly $18.5 million are expected to be immediately realized on merger closing.
The transaction is expected to modestly dilute Cousins Properties 2019 funds from operations (FFO) per share on account of one-time gains from its Norfolk Southern (NYSE:NSC) transaction. (Read more: Original post
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