-A +A

Elco

Re: Landmark Apartment Trust, Inc. – Merger Transaction 

The Company is pleased to announce that on 22 October 2015, Landmark Apartment Trust, Inc. (Hereinafter LAT), an associate (38.4%) of the Company, engaged in a merger agreement in which entities related to Starwood Capital Group and Milestone Apartments Real Estate Investment Trust would acquire the entire issued capital of LAT (100%) from LAT shareholders, in consideration for a gross cash amount (including for assuming the debts and payments of transaction expenses) of $1.9 billion. This consideration reflects the net consideration following the transaction costs of $8.17 per share. 

Completion of the transaction is contingent upon compliance with various pending warranties including approval of the LAT shareholders meeting. Completion of the transaction, pursuant to compliance with the pending warranties, is expected in the first quarter of 2016. Furthermore, the agreements that were prepared with regards to the transaction include presentation and undertakings as well as termination clauses as is standard in this type of transaction. 

In the event the transaction is completed, it is expected to generate for Elco North America, Inc., a subsidiary (100%) of the Company, free cash flow after transaction expenses and tax expenses, in the amount of NIS 640 million. The Company expects that by the date of completion, said transaction will have no material effect on the Company's financial results or on its equity. It should be noted that this data has not yet been reviewed, examined or audited by the Company's auditor. In the period since the Company first invested in the housing groups that are the subject of the transaction, this investment has generated for the Company a pre-tax profit in the amount of NIS 480 million (based on the exchange rate for the dollar on the transaction date). 

The Company's estimates as specified are forward looking information that might not materialize or might materialize differently than expected, inter alia, if the transaction is not completed due to non-compliance with the pending warranties for its completion, or is completed under different terms than those that were forged as specified above, if Company expenses are higher than current projections, etc. factors that are not in the control of the Company or that was unaware of on this date. 

LAT specializes in the acquisition, management and betterment of housing groups in southeast USA. For more information about its operations, see Section 21 of the Company's Corporate Profile included in the Company's periodic report for 2014 published on 30 March 2015 (Reference No. 2015-01-066988). 

In addition to the operations via LAT as described above, the Company specializes in housing groups in southeast USA via subsidiaries and other investees of Elco North America, Inc. 

For the immediate report published by LAT with regards to the transaction, see the following link: