Legacy Portfolio Holdings, LLC and Associates Confirm Effective Interest in Flagship Communities Real Estate Investment Trust Following Closing of Initial Public Offering
ERLANGER, Ky., Oct. 8, 2020 /CNW/ – Legacy Portfolio Holdings, LLC, Kurtis Keeney, Nathaniel Smith and Dennis Williams (together, the "Acquiror") confirmed today that, in connection with the initial public offering (the "Offering") of trust units ("Units") of Flagship Communities Real Estate Investment Trust (the "REIT") and the indirect acquisition (the "Acquisition") by Flagship Operating, LLC ("FOLLC") (the REIT's operating subsidiary) from Flagship Communities, LLC and the SSK Entities (as defined in the REIT's final prospectus dated September 28, 2020 (the "Prospectus")) of a portfolio of 45 income-producing manufactured housing communities (the "Initial Communities"), comprising 8,255 lots other than two Initial Communities comprising 622 lots, which the REIT expects to acquire upon receipt of applicable necessary customary lender and servicer consents (the "Deferred Acquisition"), it acquired beneficial ownership of, or control or direction over Units and class B units of FOLLC (the "Class B Units").
The Acquiror acquired Units and Class B Units pursuant to (i) a contribution by the Acquiror to FOLLC of certain securities in entities owning the assets previously owned by the SSK Entities, and (ii) a contribution by the former holders of Series A-2 units in Flagship Communities, LLC to the Acquiror of Class B Units received by them in connection with the acquisition by FOLLC of Flagship Communities, LLC by way of merger. The Class B Units are, in all material respects, economically equivalent to Units and are redeemable under certain circumstances for cash or Units (on a one-for-one basis subject to customary anti-dilution adjustments), as determined by FOLLC and as directed by the REIT in its sole discretion.
In connection with the Offering and the Acquisition, each Unit and Class B Unit was valued at US$15.00 per unit on the closing of the Offering (or approximately C$19.91 per unit based on the daily average exchange posted by the Bank of Canada on October 7, 2020, being US$1.00 equals C$1.3275).
Immediately prior to the closing of the Offering and the completion of the Acquisition, the Acquiror did not have beneficial ownership of, or control or direction over any Units or Class B Units.
Following the closing of the Offering and the completion of the Acquisition, the Acquiror beneficially owns or exercises control or direction over 26,112 Units and 4,634,341 Class B Units, representing an aggregate approximate 42.43% effective interest in the REIT (determined as if all Class B Units are redeemed for Units).
Further details regarding the securities held by the Acquiror are set forth in the Prospectus under the heading "Retained Interest Holders".
The Units and Class B Units held by the Acquiror are being held for investment purposes and the Acquiror may, depending on market and other conditions, increase or decrease their beneficial ownership or control of the Units or Class B Units whether through market transactions, private agreements, treasury issuances, exercise of convertible securities or otherwise. The Acquiror may obtain additional Class B Units as consideration to be paid on the closing of the pending Deferred Acquisition. The Acquiror has agreed that any Units or Class B Units owned by the Acquiror on completion of the Acquisition and the Deferred Acquisition will be subject to a contractual lock-up for 24 months following closing of the Offering, subject to certain exceptions.
This press release is being issued pursuant to the requirements of National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues of the Canadian Securities Administrators. A copy of the reports to be filed by Legacy Holdings in connection with the transactions described herein will be available under the REIT's issuer profile on SEDAR at www.sedar.com.
The head office of the REIT and the address of the Acquiror are located at 467 Erlanger Road, Erlanger, Kentucky, 41018, United States.
SOURCE Flagship Communities Real Estate Investment Trust