With more universities pulling back from dorm construction and the strongest apartment market in decades, the initial public offering of Campus Crest Communities looked well-timed in October 2010. Five years later, Chicago-based Harrison Street Real Estate Capital is paying about $7.03 per share to buy the Charlotte-based real-estate investment trust, a 44% decline. The sale, which values the company at about $1.9 billion, comes after the board ditched its management team and brought in turnaround consultants Alvarez & Marsal in April to reduce debt and search for a buyer. Privately held Harrison Street, which manages more than $7 billion and has invested jointly with Campus Crest on some projects, stepped up for the deal expected to close in the first quarter of 2016.
As of October, Campus Crest’s portfolio included 79 apartment communities, offering swimming pools, fitness centers and game rooms. Holdings include 16 joint ventures and encompass more than 15,000 units in 24 states. Former CEO Ted Rollins and former vice chairman Michael Hartnett started the company in 2004, banking on the trend of students preferring fancy apartments to spartan dorm rooms. In 2013, the company bought a 48% interest in Copper Beech Townhome Communities — its 35 properties include one at East Carolina University — and then bought the rest of the business in 2015. Debt nearly doubled from $351 million in 2012 to $695 million in 2014, proving onerous as leasing activity didn’t meet projections.
“The company has certainly struggled with growing quickly, both organically when it was in the development and construction business and also through acquisition,” David Coles, interim chief executive officer, said on a July conference call. While investors got stuck, Rollins and Hartnett received a combined $8 million in 2012 and 2013, according to the company’s proxy issued last year. Company officials declined requests for an interview.
Briefs
CHARLOTTE — Regions Financial will acquire BlackArch Partners, a middle-market investment banking firm, for an undisclosed amount. Started in 2010, BlackArch provides mergers and acquisitions advisory services. Based in Birmingham, Ala., Regions has $125 billion in assets and operates 1,630 offices in 16 states.
CHARLOTTE — Snack-maker Snyder’s-Lance will acquire San Francisco-based Diamond Foods in a $1.91 billion cash and stock deal that includes $640 million in debt. Diamond Foods’ products include Pop Secret popcorn and Kettle Brand chips.
CHARLOTTE — Driven Brands acquired Overland Park, Kan.-based Carstar Auto Body Repair Experts, which operates more than 240 collision-repair centers in 30 states. Terms were not disclosed. Based here, Driven Brands was bought by Atlanta-based private-equity firm Roark Capital Group in April and operates more than 2,000 car-care centers across the United States. Brands include Maaco and Meineke Car Care Centers.
HICKORY — Duke LifePoint Healthcare will acquire the 355-bed Frye Regional Medical Center here and the 137-bed Central Carolina Hospital in Sanford from Dallas-based Tenet Healthcare. Terms were not disclosed. Brentwood, Tenn.-based Duke LifePoint, a joint venture of Duke University Health System and LifePoint Health, operates 12 hospitals.
CHARLOTTE — NewDominion Bank will receive $20 million from investors Tricadia Capital Management and EJF Capital. The investment is in response to a regulatory order requiring increased capital. Started here in 2005, the bank has about $300 million in assets.
CHARLOTTE — Lifetouch National School Studios will close its local production plant by June 2016, eliminating 206 jobs. The Eden Prairie, Minn.-based company provides photography and yearbooks for schools and churches.