Pretium, Ares Management to acquire Front Yard Residential for $2.4bn

Pretium and funds managed by the Real Estate Equity and Alternative Credit strategies of Ares Management will acquire Front Yard Residential, a US Virgin Islands-based real estate investment trust company, for nearly $2.4 billion, including debt.

According to the definitive agreement signed between the parties, the shareholders of Front Yard Residential will receive $13.50 in cash per share.

Front Yard Residential is engaged in offering single-family housing in neighborhoods across the US.

Pretium calls itself a specialized alternative investment management company, which focuses on residential real estate, corporate credit, and mortgage finance.

The acquisition by Pretium and alternative investment manager Ares Management is expected to make it the second-largest single-family rental owner and operator in the US with more than 55,000 cash-flowing assets in its portfolio.

George Ellison – CEO of Front Yard Residential said: “Pretium has built an impressive portfolio of single-family rental homes and has developed an industry-leading platform that includes more than 40,000 homes under management.

“I am confident that the combination of our complementary portfolios, with increased size and scale, operating leverage and efficiencies, will deliver significant benefits to our platform and residents.”

Post-acquisition, Front Yard Residential will have access to Pretium’s scale, expertise, data analytics, and capabilities in operational and capital markets and also its property and asset management platform – Progress Residential.

Don Mullen – Pretium Chairman and CEO said: “This transaction is an important development in the evolution of the single-family rental sector as the asset class continues to perform strongly and attract increasing amounts of institutional investment.”

“Pretium is proud of the role we have played in driving the growth and maturation of the industry, and we look forward to building on that track record with this acquisition. We welcome the Front Yard team to the Pretium family and we, along with our partners at Ares Management, will build on the significant progress they have achieved as we further invest in this business and apply our scale and strategic and operational expertise to deliver benefits for renters, communities, and investors.”

Once the approval of the shareholders of a majority of Front Yard’s outstanding shares and the customary closing conditions are met,

The deal, which is subject to Front Yard Residential’s shareholders’ approval, and meeting of customary closing conditions, is expected to be wrapped up in Q1 2021.