Two Harbors Investment Corp. Announces Agreement to Contribute its Single-Family Rental Properties to Silver Bay Realty Trust Corp. in Connection with Silver Bay IPO
NEW YORK, December 4, 2012 – Two Harbors Investment Corp. (NYSE: TWO; NYSE MKT: TWO.WS) today announced it has entered into an agreement with Silver Bay Realty Trust Corp. (“Silver Bay”), which will enable Silver Bay to acquire a portfolio of more than 3,100 single-family residential properties simultaneously with the closing of Silver Bay’s initial public offering of its common stock (“IPO”).
Pursuant to a contribution agreement, Two Harbors expects to contribute its existing portfolio of over 2,200 single-family properties to Silver Bay, together with $50 million in cash that will be used by Two Harbors to acquire and renovate properties through the closing. In exchange for the contribution, Two Harbors will receive approximately 17.8 million shares of common stock of Silver Bay, which will represent approximately 47.7% of the outstanding stock of Silver Bay after the offering or approximately 45.3% if the underwriters exercise their option to acquire additional shares within 30 days following the offering. The shares received by Two Harbors will be subject to a 90-day lock-up period following the closing of the IPO, after which Two Harbors may, subject to the discretion and approval of its Board of Directors and in compliance with applicable securities laws, hold, sell or otherwise dispose of the shares, which may include a distribution of the shares by means of a special dividend to Two Harbors shareholders. The Silver Bay common stock will be listed on the New York Stock Exchange under the symbol “SBY.”
“We are pleased to announce the progress of the Silver Bay transaction,” said Thomas Siering, President and Chief Executive Officer of Two Harbors. “Optimization of shareholder value is our primary objective. We believe Two Harbors shareholders are best served by the creation of a stand-alone, pure-play single-family residential property REIT.”
Silver Bay is a newly formed Maryland corporation focused on the acquisition, renovation, leasing and management of single-family residential properties for rental income and long term appreciation. Silver Bay will be externally managed by PRCM Real Estate Advisers LLC, a joint venture between an affiliate of Pine River Capital Management L.P. and Provident Real Estate Advisors LLC. An affiliate of Pine River also serves as the external manager of Two Harbors and provides property acquisition and property management services with respect to Two Harbors’ portfolio of single-family rental properties. Entities managed by Provident are also contributing approximately 880 single-family residential properties to Silver Bay as part of the transaction.
Two Harbors’ Board of Directors formed a committee of independent directors to review, negotiate and approve the transaction and consider and review potential alternative transactions or alternative structures for the proposed transaction. The committee has been advised by Gleacher & Company Securities, Inc. as its financial advisor and Goodwin Procter LLP as its legal counsel with respect to the transaction and to represent the interests of Two Harbors and its shareholders. The contribution remains subject to final approval of the terms of the offering by the committee and Two Harbors’ Board of Directors, satisfaction of all conditions to the closing of the transaction, Securities and Exchange Commission clearance and market conditions.
A registration statement relating to Silver Bay’s initial public offering has been filed with the Securities and Exchange Commission but has not yet become effective. This press release does not constitute an offer of any securities for sale.
Two Harbors Investment Corp.
Two Harbors Investment Corp., a Maryland corporation, is a real estate investment trust that invests in residential mortgage-backed securities, residential mortgage loans, residential real properties and other financial assets.
This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including with respect to the completion of Silver Bay’s IPO or the consummation of the contribution transaction. Actual results may differ from expectations, estimates and projections and, consequently, readers should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “target,” “assume,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expected results.
Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Two Harbors does not undertake or accept any obligation to release publicly any updates or revisions to any forward-looking statement to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based. Additional information concerning these and other risk factors is contained in Two Harbors’ most recent filings with the Securities and Exchange Commission. All subsequent written and oral forward looking statements concerning Two Harbors or matters attributable to Two Harbors or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements above.
Investors: July Hugen, Investor Relations, Two Harbors Investment Corp., 612-629-2514, firstname.lastname@example.org.