Southfield-based Sun Communities Inc., a provider of manufactured home communities and RV resorts, has announced it will acquire Arizona-based Carefree Communities Inc., an owner and operator of senior manufactured housing communities and destination RV resorts, for about $1.68 billion.
“Similar to our 2014 acquisition of the American Land Lease portfolio, this accretive transaction enhances our geographic diversity, deepens our presence in key coastal markets, and boosts our age-restricted sites to 33 percent of our portfolio,” says Gary Shiffman, chairman and CEO of Sun Communities. “The Carefree acquisition adds highly desirable locations in California where we are increasing our holdings to 6 percent from under 1 percent, and also broadens our market share throughout Florida where we continue to see high demand.”
Sun Communities announced Wednesday that it has priced a public offering of 5.3 million shares of its common stock at $66.50 per share. The offering increased from 4 million shares to 5.3 million shares. As part of the offering, the company granted the underwriters a 30-day option to purchase up to an additional 787,500 shares of its common stock.
At closing, which will be no later than July, Sun Communities will assume about $1 billion in debt from Carefree Communities.
“We anticipate a smooth transition because Sun Communities and Carefree are equally committed to operational excellence and share in the same mission, vision, and values of taking care of our associates so they can deliver an exceptional lifestyle to our residents,” says Colleen Edwards, vice chairman and co-founder of Carefree Communities.
Edwards says Carefree’s manufactured housing and RV communities will be operated by Sun Communities’ management team under the Sun Communities brand. Carefree’s team will remain in place during the interim period to oversee the transaction and ensure a smooth transition for residents.
“In the last two years, (Sun Communities) has bought well over $3 billion of assets,” says Arthur Weiss, partner and board member at Southfield-based Jaffe, Raitt, Heuer, and Weiss, who acted as Sun Communities’ legal adviser. “We worked side by side with Sun through the transaction both from an economics point of view and single point of view, and the company executed (the acquisition) unbelievably.”
Sun Communities operates and owns a portfolio of 233 communities comprised of nearly 89,500 developed sites in 30 states. Carefree Communities directly or indirectly owns more than 100 manufactured housing and RV communities, comprised of nearly 28,000 total sites.