Camden Property Trust acquired Paragon Group, Inc. for All-stock, tax-free merger accounted for as a purchase; transaction value not separately disclosed. Each Paragon common share was exchanged for 0.64 of a Camden common share, an exchange ratio set off Camden's $27.75 and Paragon's $17.75 closing prices on December 4, 1996. The combination united Paragon's interest in about 16,810 apartment units with Camden's 19,389, creating a company with roughly 36,199 units and total assets in excess of $1.25 billion., a transaction completed in April 1997, structured as Stock-for-stock, tax-free reorganization treated as a purchase for accounting. Paragon Group, Inc. merged with and into Camden Subsidiary, Inc., a wholly owned Camden subsidiary, with each Paragon share converted into 0.64 of a Camden common share (subject to limited adjustment).. The deal was a Merger.
Paragon Group, Inc. operates in Multifamily apartments, is based in United States (national apartment portfolio). Camden combined with Paragon Group, a publicly traded apartment REIT, merging Paragon into a wholly owned Camden subsidiary in an all-stock transaction. The deal roughly doubled Camden's unit count to about 36,199 apartment units and made the combined company, at the time, the fourth-largest apartment REIT, with the combined entity headquartered in Houston.
The companies framed the merger as part of multifamily-sector consolidation, arguing that a larger, better-diversified REIT would enjoy a lower cost of capital; Camden expected roughly $6 million of first-full-year administrative cost savings and an immediately accretive effect on funds from operations.
Paragon nearly doubled Camden's apartment unit count and added diversification and scale at a time of REIT consolidation, positioning the combined company as the fourth-largest apartment REIT with an expected lower cost of capital. Approximately $6 million of administrative cost savings expected in the first full year of operation, with the merger anticipated to be immediately accretive to funds from operations. Paragon merged into Camden Subsidiary, Inc.; Camden's Board of Trust Managers was expanded from five to seven members with the addition of William Cooper and Lewis Levey, and the combined company was headquartered in Houston. PaineWebber advised Camden and Merrill Lynch advised Paragon.
The multifamily sector is undergoing significant consolidation and the larger, better diversified companies should have access to a lower cost of capital which will lead to increased shareholder value. After carefully reviewing all strategic alternatives, Paragon's management believes that a merger with Camden will maximize long-term shareholder value.William Cooper, Paragon Group (who joined Camden's Board of Trust Managers)
Advisory firms were not disclosed for this transaction.