Campar Capital Corporation to Acquire 80% Interest in San Antonio Apartment Complex as Its Qualifying Transaction
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TORONTO, Aug. 11, 2016 /CNW/ - (TSXV: CHKP) Campar Capital Corporation (the "Corporation"), a capital pool company (as defined in TSX Venture Exchange ("TSXV") Policy 2.4 – Capital Pool Companies (the "CPC Policy")), is pleased to announce that it has agreed to indirectly acquire an approximate 80% interest in a 276-unit Class "A" apartment community (the "Property") located in San Antonio, Texas as its Qualifying Transaction (as that term is defined in the CPC Policy) pursuant to two purchase and sale agreements (the "Purchase Agreements") made effective August 9, 2016 between the Corporation's newly created indirect US subsidiary entity ("Subco") and each of Huebner 192, LLC and Huebner 84, LLC (together, the "Sellers"). Subco has waived the due diligence condition in its favour pursuant to the Purchase Agreements and intends to complete the acquisition of the Property on or about September 30, 2016.
Both of the Sellers are Texas limited liability companies and are entities unrelated to the Corporation or any of its Directors or Officers. As such, the acquisition will not be a Non-Arm's Length Qualifying Transaction (as that term is defined in the CPC Policy). The acquisition of the Property will be subject to receipt of all necessary approvals, including the approval of the TSXV, and certain other closing conditions set forth in the Purchase Agreements, including successful financing.
Additional information about the Property as well as the material terms of the acquisition are set forth below under "Additional Information About the Property" and "Additional Details of the Acquisition", respectively, and will be set out in the final filing statement (the "Filing Statement") to be filed with the TSXV and on SEDAR.
Additional Information About the Property
The Property is a Class "A" apartment community located at 7838-7886 Huebner Road, San Antonio, Texas in close proximity to Interstate 10 and Bandera Road (Highway 16) and the Loop 410/Interstate 10 intersection. It is also located in close proximity to two of San Antonio's largest employers, the South Texas Medical Center and USAA, which together employ over 76,000 people. The Property is situated on 11.91 acres of land and contains 276 units situated in 14, three-storey buildings in addition to a stand-alone clubhouse. Unit amenities include granite countertops, stainless steel appliances, tile backsplashes, large farm house kitchen sinks, laundry machines, built-in computer desks and plank flooring throughout the common areas. Exterior amenities include a state-of-the-art fitness studio, a resort-style pool, a business centre, a car care centre, a resident lounge and a dog park as well as 434 parking spaces, of which 115 are covered. As of July 7, 2016, the Property was 97.1% occupied and produced an average monthly rent in the amount of US$1.24 per square foot based on the monthly in-place rent of all occupied suites.
Directors and Senior Officers of the Corporation
Following completion of the acquisition of the Property, the members of the board of directors of the Corporation are expected to remain as Daniel Drimmer, Martin Liddell and Alon Ossip.
The senior officers of the Corporation are also expected to be Daniel Drimmer as Chief Executive Officer, Evan Kirsh as President, Martin Liddell as Chief Financial Officer and David Hanick as Secretary.
The background of each of the directors and senior officers of the Corporation following the acquisition is set forth below:
Daniel Drimmer – Director and Chief Executive Officer
Daniel Drimmer is the founder, President and Chief Executive Officer of Starlight, a Canadian real estate asset management company focused on the acquisition, ownership and management of commercial and residential properties across Canada and the U.S., with a portfolio of approximately 33,000 residential rental units and over 2,500,000 square feet in commercial properties. Mr. Drimmer is also a director and Chief Executive Officer of Starlight U.S. Multi-Family Core Fund, Starlight U.S. Multi-Family (No. 2) Core Fund, Starlight U.S. Multi-Family (No. 3) Core Fund and Starlight U.S. Multi-Family (No. 4) Core Fund, a member of the Board of Trustees of TSX-listed Northview Apartment REIT, and is a member of the Board of Directors of the Mortgage Company of Canada Inc. In addition to the formation of Starlight, Mr. Drimmer is the founder, President, CEO and Chairman of the Board of TSX-listed True North Commercial REIT and the formerly TSX-listed True North Apartment REIT. Mr. Drimmer was TSX-listed TransGlobe Apartment REIT's creator and sponsor from May 2010 to August 2011. Over the last seven years, Mr. Drimmer has completed more than $15 billion worth of acquisition and financing transactions in residential and commercial real estate. Mr. Drimmer obtained a Bachelor of Arts degree from the University of Western Ontario, and both a Master of Business Administration and a Master's degree in Contemporary European Policy Making from European University in Geneva, Switzerland.
Evan Kirsh – President
Evan Kirsh has more than 25 years of real estate experience with the last 15 years of his career having been dedicated exclusively to the multi-family housing industry. Mr. Kirsh's experience includes executive positions with Revera Inc., GWL Realty Advisors and MetCap Living Inc. as well as positions with Brazos Advisors, Citibank Canada and Manulife Real Estate (the global real estate arm of Manulife Financial Corporation). During his tenure with these companies, Mr. Kirsh has been involved in the asset management and operation of over $7.5 billion of multi-family assets as well as the acquisition or disposition of approximately 23,000 multi-family housing units comprising a total value of more than $2 billion. Mr. Kirsh is currently the President of Starlight U.S. Multi-Family Core Fund, Starlight U.S. Multi-Family (No. 2) Core Fund, Starlight U.S. Multi-Family (No. 3) Core Fund and Starlight U.S. Multi-Family (No. 4) Core Fund 4. Evan holds a Bachelor of Arts in Honours Business Administration and a Master of Business Administration from the University of Western Ontario.
Alon Ossip – Director
Alon Ossip is the Chief Executive Officer of The Stronach Group, a privately-held consortium that owns, operates and manages a number of leading businesses in a wide range of industries, including thoroughbred racing and gaming, real estate, electric vehicle technologies, and agribusiness. Mr. Ossip was formerly a trustee of TSX-listed True North Apartment REIT and TransGlobe Apartment REIT. From October 2006 to July 2013, Mr. Ossip was Executive Vice President of TSX-listed Magna International Inc., and was previously a Partner at Goodman and Carr LLP and Associate Counsel at Miller Thomson LLP. Mr. Ossip was also formerly a director, officer and founding shareholder of Workbrain Corporation (a TSX-listed public company that was sold to Infor Global Solutions European Finance, S.a.R.L. in 2007) from June 2003 to June 2007. Mr. Ossip has a Bachelor of Laws from York University (Osgoode Hall) and a Bachelor of Arts from the University of Toronto.
Martin Liddell – Director and Chief Financial Officer
Martin Liddell joined Starlight in January 2012 and is currently the Chief Financial Officer of Starlight U.S. Multi-Family as well as the Chief Financial Officer of Starlight U.S. Multi-Family Core Fund, Starlight U.S. Multi-Family (No. 2) Core Fund, Starlight U.S. Multi-Family (No. 3) Core Fund and Starlight U.S. Multi-Family (No. 4) Core Fund. From 2012 to 2015, Mr. Liddell was the Chief Financial Officer of True North Apartment REIT. Prior to joining Starlight, Mr. Liddell was the Executive Vice-President and Chief Financial Officer of Leisureworld Senior Care Corporation from 2006 until 2011 where he played a critical role in the March 2010 initial public offering. Previously, Mr. Liddell held the position of Chief Financial Officer of NBS Technologies Inc. Between 2000 and 2005, Mr. Liddell served in a variety of increasingly senior corporate development and financial management roles at Tyco International Ltd., and prior to that from 1995 to 2000, provided strategic corporate finance and mergers and acquisitions advice to clients at KPMG LLP in the United Kingdom and Europe. Mr. Liddell holds a Bachelor of Arts (Honours) in accounting and finance from Liverpool John Moores University, United Kingdom, and received his Chartered Accountant designation in 1995. Mr. Liddell is a member of the Institute of Chartered Accountants in England and Wales.
David Hanick – Secretary
David Hanick joined Starlight in November 2012. Prior to joining Starlight, Mr. Hanick was a corporate partner in the Toronto office of Osler, Hoskin & Harcourt LLP where he focused on public and private mergers and acquisitions as well as capital markets transactions acting for issuers, underwriters and private equity firms in various sectors including the real estate sector. Mr. Hanick has more than 15 years of legal, capital markets, mergers and acquisitions, and corporate governance expertise, and has participated in transactions totaling more than $22 billion. Mr. Hanick is also the Secretary of Starlight U.S. Multi-Family Core Fund, Starlight U.S. Multi-Family (No. 2) Core Fund, Starlight U.S. Multi-Family (No. 3) Core Fund and Starlight U.S. Multi-Family (No. 4) Core Fund. Mr. Hanick is a member of the Law Society of Upper Canada and holds a joint Masters of Business Administration from the Schulich School of Business and Bachelor of Laws from Osgoode Hall Law School.
Additional Details of the Acquisition
The Corporation will indirectly acquire an 80% interest in the Property from the Sellers. The total purchase price for a 100% interest in the Property is approximately US$35,550,000, subject to customary prorations of real estate taxes and other items of income and expense with respect to the Property. The total purchase price will be satisfied from the proceeds of a first mortgage loan obtained from a third party lender in the principal amount of US$23,237,500 at an interest rate expected to be 2.24% per annum and a mezzanine loan obtained from another third party lender in the principal amount of US$7,000,000 at an interest rate of 9.25% per annum, with the remainder of the purchase price to be paid in cash. The Corporation expects to fund its pro rata portion of such remaining amount (being approximately US$4,250,000) by way of cash on hand as well as proceeds from an unsecured loan obtained by a related party of the Corporation from an arm's length lender in the principal amount of approximately US$776,000 at an interest rate of approximately 14% per annum which will be re-lent by such related party to the Corporation on same terms, all of which will be funded down to Subco by way of equity subscriptions through the Corporation's wholly-owned, newly created, Maryland subsidiary. Each of the above-noted loans is expected to have an initial four month term with one 60 day extension option.
The following table highlights selected unaudited financial information about the Property as at and for the six months ended June 30, 2016 and the year ended December 31, 2015:
|
|
June 30, 2016 |
December 31, 2015 |
| Revenue from property operations |
$1,780 |
$3,409 |
| Property operating costs |
$449 |
$954 |
| Income from operations |
$909 |
$1,761 |
| Net income |
$1,694 |
$5,586 |
| Total assets |
$36,534 |
$36,189 |
Sponsorship
Sponsorship of a qualifying transaction is required by the TSXV unless exempt in accordance with TSXV policies. The Corporation intends to seek a waiver from the TSXV of the sponsorship requirement but if such waiver is not obtained, the Corporation will then retain a qualified sponsor. In support of its waiver application, an independent appraisal of the fair market value of the Property will be relied upon and a summary thereof will be set out in the Filing Statement.
Trading Halt
The Corporation's common shares are currently halted and the Corporation anticipates that they will remain halted until the documentation required by the TSXV for the proposed transaction is provided to the TSXV.
About Campar Capital Corporation
The principal business of the Corporation is the identification and evaluation of assets or businesses with a view to completing a qualifying transaction. The Corporation has not commenced commercial operations and has no assets other than cash.
Cautions Regarding Future Plans and Forward Looking Information
This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Examples of such statements include statements concerning the terms and completion the Property acquisition, the financing of the Property acquisition, the composition of the board and management of the Corporation following the acquisition and sponsorship of the Corporation and waiver from such requirement. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the Corporation.
Completion of the proposed transaction is subject to a number of conditions, including but not limited to, TSXV acceptance and if applicable pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the transaction, any information released or received with respect to such transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
The TSXV has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release. Neither the TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Campar Capital Corporation
please contact: Daniel Drimmer, President and Chief Executive Officer, at Tel: (416) 234-8444, [email protected], or Martin Liddell, Chief Financial Officer, at Tel: (416) 234-8444, [email protected]
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