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SUN COMMUNITIES, INC. ANNOUNCES SALE OF SAFE HARBOR MARINAS TO BLACKSTONE INFRASTRUCTURE IN AN ALL-CASH TRANSACTION FOR $5.65 BILLION
SUISun Communities(SUI) Newsfilter·2025-02-24 14:20

Core Viewpoint - Sun Communities, Inc. has entered into a definitive agreement to sell its interests in Safe Harbor Marinas to Blackstone Infrastructure for 5.65billion,aimingtorefocusonitscoremanufacturedhousingandrecreationalvehiclesegmentswhileenhancingitsfinancialflexibility[1][2][4].TransactionDetails−Theall−cashpurchasepriceof5.65 billion, aiming to refocus on its core manufactured housing and recreational vehicle segments while enhancing its financial flexibility [1][2][4]. Transaction Details - The all-cash purchase price of 5.65 billion represents an approximate 21x multiple on the estimated 2024 Funds From Operations (FFO) of Safe Harbor [2]. - The transaction is expected to yield approximately 5.5billioninpre−taxproceedsaftertransactioncosts,whichwillbeutilizedfordebtreduction,shareholderdistributions,andreinvestmentincorebusinesses[3].StrategicImplications−Post−transaction,Sun′sNorthAmericamanufacturedhousingandRVportfolioisprojectedtoaccountforabout905.5 billion in pre-tax proceeds after transaction costs, which will be utilized for debt reduction, shareholder distributions, and reinvestment in core businesses [3]. Strategic Implications - Post-transaction, Sun's North America manufactured housing and RV portfolio is projected to account for about 90% of the Company's Net Operating Income (NOI), streamlining its focus as a pure-play owner and operator in these segments [8]. - The transaction is anticipated to significantly reduce the Company's net debt to trailing 12 months EBITDA ratio from approximately 6.0x to between 2.5x and 3.0x at closing [8]. - The sale is expected to decrease exposure to non-annual income streams, positively impacting financial metrics such as margin profile and revenue-to-cash flow conversion [8]. Financial Performance - The transaction is projected to realize a substantial gain, with an estimated book gain of approximately 1.3 billion from Sun's four-year ownership of Safe Harbor [8]. Timing and Advisors - The initial closing of the transaction is expected in the second quarter of 2025, subject to customary closing conditions [7]. - Lazard Frères & Co. is acting as the financial advisor, while Latham & Watkins LLP and Taft Stettinius & Hollister are serving as legal advisors for the transaction [9].