FREE MEMBERSHIP Includes » ABL Advisor eNews + iData Blasts | JOIN NOW ABLAdvisor Gray ABLAdvisor Blue
Skip Navigation LinksHome / News / Read News


Pretium, Ares Management Announce $2.4B Take-Private Transaction with Front Yard Residential

October 20, 2020, 08:10 AM
Filed Under: Industry News

Pretium and a group of its investors and funds managed by the Real Estate Equity and Alternative Credit strategies of Ares Management Corporation announced a strategic partnership to acquire Front Yard Residential Corporation, a leading provider of high-quality and affordable single-family rental ("SFR") housing, in an all-cash transaction that values Front Yard at $2.4 billion.

The transaction demonstrates investors' increasing demand for SFR assets and the unique investment opportunities available to operators such as Pretium that possess the requisite scale to drive margins. Pretium led the transaction and will manage the venture following closing.

Front Yard will benefit from the scale, expertise, data analytics, and operational and capital markets capabilities of Pretium and its wholly owned property and asset management platform Progress Residential. Upon completion of the transaction, Pretium will become the second-largest owner and operator of SFR properties in the United States with a portfolio of more than 55,000 cash-flowing single-family rentals throughout the country.

"This transaction further establishes Pretium as both a pioneer and a leader in the SFR space since 2012, having completed the industry's largest strategic recapitalization in 2019 and now leading the industry's first public-to-private transaction," stated Don Mullen, Chairman and CEO at Pretium. "We firmly believe that scale is paramount to outperformance and continuing to create meaningful liquidity for SFR investors is necessary to ensure robust valuations and the continued flow of institutional capital into the SFR asset class."

"The acquisition of Front Yard and its team represents a unique and strategic opportunity to leverage our differentiating scale and best-in-class operating platform to drive margins and deliver attractive returns to investors," added Dana Hamilton, Head of Real Estate at Pretium. "We look forward to working with the Front Yard team to make our resident-focused management approach available to a greater number and more diverse set of households, as well as to new markets where affordability challenges are growing."

"We look forward to partnering with Pretium on this compelling opportunity to invest in an attractive and well-diversified portfolio of single-family rental assets," said David Roth, Partner and Head of U.S. Real Estate Equity in the Ares Real Estate Group. "SFR has become a core real estate asset class that fits well within our investment strategy, and we believe Pretium's experience as one of the earliest innovators in the sector makes them an ideal partner for us."

"This transaction is a perfect example of how we collaborate and partner across our platform to offer flexible capital solutions of scale while making differentiated investments on behalf of our investors," said Joel Holsinger, Partner and Co-Head of Alternative Credit at Ares Management. "We are excited to partner with our real estate colleagues and Pretium to benefit all of our stakeholders."

The transaction is expected to close in the first quarter of 2021, subject to the satisfaction of customary closing conditions.

RBC Capital Markets, LLC is serving as financial advisor to Pretium. BofA Securities is serving as financial advisor to Ares. Sidley Austin is serving as M&A legal counsel, Fried Frank as partnership legal counsel, and Hunton Andrews Kurth as special tax and financing counsel to Pretium. Latham & Watkins is serving as legal counsel to Ares.

Week's News

Comments From Our Members

You must be an ABL Advisor member to post comments. Login or Join Now.