TORONTO -- CHC Student Housing Corp. is joining forces with the Dundee financial group to create a bigger public company that would manage up to 4,700 residential beds in 13 markets from Fredericton to Windsor, Ont.
The corporation (TSXV:CHC) is expected to be renamed Canadian Student Living Group, led by CHC chief executive Mark Hansen and his management team.
CHC and Dundee see student housing as an attractive asset class that's underdeveloped in Canada.
They say only three per cent of post-secondary students in Canada live in purpose-built housing compared with 12 per cent in the United States and 23 per cent in the United Kingdom.
CHC will be combined with Dundee Acquisition Ltd. (TSX:DAQ.A), a publicly-traded affiliate of Dundee Corp. (TSX:DC.A), which will provide financial resources and business connections.
Dundee Acquisition has concurrently reached agreements with other parties to acquire additional housing properties and create a portfolio with a total value of up to $420 million, including eight properties currently owned or managed by CHC.
The proposal will take a multi-step approach, beginning with Dundee exchanging its shares for shares of CHC, which currently owns four student housing properties.
After the renamed Canadian Student Living is created, it will acquire an additional four properties owned by a CHC-led limited partnership and up to 12 additional student housing properties -- including seven that have signed binding purchase agreements. Five others are under non-binding letters of intent or agreements in principle.
The two companies expect the transactions to be completed in November.
"We are extremely excited about this transaction and believe it creates a strong platform going forward for the benefit of all current CHC stakeholders," Hansen said in a statement issued Thursday.
"The DAQ team has done a great deal to help create CSL, and position it to be a market leader in Canadian student housing with a world class portfolio of high-quality operating assets."
