Sun Communities, a leading national real estate investment trust (REIT) that owns, operates or has an interest in manufactured housing and RV communities, has entered into an agreement to acquire a 31-community manufactured housing portfolio for $343.6 million in a merger with Jensen’s, Inc.
The purchase price with adjustments will be paid through a combination of issuing common stock to Jensen’s shareholders and a cash payment.
The company acquires 31 communities with 5,230 developed home sites and better than 460 available expansion sites. Sun’s new communities are located in eight states with more than a third of the sites in the state of Connecticut. Seventy-seven percent of the communities are age-restricted. The portfolio was 92.5% occupied as of June 30.
“This acquisition is a great opportunity to further grow our manufactured housing portfolio with high-quality communities that match our investment criteria,” said Gary A. Shiffman, Sun Communities Chairman and CEO. “We are very excited to add the owners of Jensen’s as shareholders due to their belief in our ability to create ongoing value.”
The total purchase price is $343.6 million includes an allocation of approximately $8 million for expansion land and adjacent parcels ready for development. The purchase price will be adjusted at closing for prorations and certain other adjustments, including a reduction of approximately $60 million for debt that will be owed by Jensen’s as of the closing.
At the closing, Sun will issue to Jensen’s shareholders $274.8 million in shares of its common stock at an issuance price of $139.3072 per share based on a 20-day trailing volume-weighted average share price and pay the balance of the adjusted purchase price in cash.
The transaction is subject to customary closing conditions, and is expected to close by the end of 2019.
Kris Jensen, President of Jensen’s said, “After engaging in a thorough sale process for our portfolio, we are excited to be joining the Sun platform and to become Sun shareholders. We are impressed with Sun’s stellar reputation, successful track record of integration, and ability to operate their communities to the highest of standards.”