Sun Communities Inc., a real estate investment trust that owns and operates or has an interest in manufactured housing and recreational vehicle communities, today announced that it has entered into an agreement to acquire a 31-community manufactured housing portfolio for $343.6 million through a merger of Jensen’s, Inc. into a subsidiary of the Company. The purchase price, after adjustments as described below, will be paid through a combination of issuing common stock to Jensen’s shareholders and a cash payment.
The Company is acquiring 31 manufactured housing communities comprising 5,230 developed sites and over 460 additional expansion sites available for development. The communities are located in 8 states with 35% of the sites in Connecticut. The 77% age restricted portfolio is approximately 92.5% occupied as of June 30, 2019.
The total purchase price is $343.6 million, which includes an allocation of approximately $8.0 million for expansion land and adjacent parcels ready for development. The purchase price will be adjusted at closing for pro rations and certain other adjustments, including a reduction of approximately $60.0 million for debt that will be owed by Jensen’s as of the closing. At the closing, the Company will issue to Jensen’s shareholders $274.8 million in shares of its common stock at an issuance price of $139.3072 per share based on a 20-day trailing volume weighted average share price and pay the balance of the adjusted purchase price in cash. The transaction is subject to customary closing conditions, and is expected to close by year-end 2019. It is expected to be accretive to 2020 earnings.
“This acquisition is a great opportunity to further grow our Manufactured Housing portfolio with high quality communities that match our investment criteria,” said Gary A. Shiffman, Sun Communities Chairman and CEO. “We are very excited to add the owners of Jensen’s as shareholders due to their belief in our ability to create ongoing value.”
Kris Jensen, President of Jensen’s said, “After engaging in a thorough sale process for our portfolio, we are excited to be joining the Sun platform and to become Sun shareholders. We are impressed with Sun’s stellar reputation, successful track record of integration, and ability to operate their communities to the highest of standards.”