M&A
April 20, 2022
4 minutes read

Private Equity Firm Blackstone To Buy Student Housing Developer ACC For $13B

Blackstone (NYSE: BX), the American private equity giant, has made yet another massive acquisition in the real estate sector. The…

Blackstone (NYSE: BX), the American private equity giant, has made yet another massive acquisition in the real estate sector. The firm is buying American Campus Communities (NYSE: ACC), the largest student housing developer in the US.

Blackstone will pay $65.47 in cash per ACC share, summing up to $12.8bn, including debt. The purchase price represents a 30% premium to ACC’s market value as of February 16, 2022, the day the student housing giant notified investors of its willingness to entertain an acquisition offer.

ACC develops, owns, and manages student housing communities across the United States. It currently owns 166 properties that each pulls in millions of dollars in annual revenue. In 2021, ACC disclosed $942m in revenue and a net income of $33mn. Its revenue grew 8% from 2020 to 2021, but net income fell by half in that same period.

ACC has been under significant pressure from an activist investor, Land & Buildings, since last December. Though a minor (<5%) shareholder, Land & Buildings pressed ACC to sell some real estate assets and return the money to shareholders through stock buybacks.

In February, following deliberations with Land & Buildings, ACC notified investors of its willingness to accept an acquisition offer. It turns out that Blackstone, a gargantuan real estate investor, was the willing buyer.

Blackstone manages $280bn in real estate assets and is an active investor in the residential and commercial real estate sectors. It has made several billion-dollar acquisitions this year, including Bluerock ($3.6bn), Preferred Apartment Communities ($5.8bn), and Resource REIT ($3.7BN). These acquisitions were all investment trusts for multifamily properties.

Blackstone is the world’s biggest private equity firm, with a whopping $880bn of assets under management. It’s an active investor across many sectors outside real estate, including technology companies.