Update 11/10/20 – Three months after the public announcement of its intention to buy Jernigan Capital, a subsidiary of NexPoint Advisors finalized the acquisition. According to the Memphis Business Journal (MBJ), JCAP executives should remain with the company now that it is a subsidiary of NexPoint.

Although the two companies spoke in January of a potential deal to take JCAP private, NexPoint waited until May to notify JCAP management of its intention to make an all-cash offer in writing. In the meantime, JCAP has reportedly discussed possible deals with other companies, MBJ reported.

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10/28/20 – Jernigan Capital shareholders approved the sale of the company to affiliates of NexPoint at a special meeting on Monday. According to a press release, shareholders representing 77.7% of the company’s outstanding shares voted, with about 97.7% of the vote in favor of the transaction.

NexPoint and Jernigan intend to complete the transaction as soon as possible, although it is not clear if this will be done before Q4 as previously reported. Jernigan’s shares will cease trading on the New York Stock Exchange once the transaction is completed, the statement said.

“We are very pleased to announce a shareholder vote that was overwhelmingly in favor of our previously announced merger with NexPoint,” said Good. “The high voter turnout and 97.7% of favorable votes testify to the merits of this transaction and validate that the merger is in the best interest of all JCAP stakeholders. We are convinced that the merger achieves the objective of maximizing value for our shareholders. “

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8/4/20 – A subsidiary of NexPoint Advisors LP, an investment advisory firm, has entered into an agreement to acquire Jernigan Capital Inc. (JCAP), an investment bank and advisory firm that also has self-storage facilities, for about $ 900 million in cash. The deal was unanimously approved by the JCAP board of directors, although it has yet to be approved by the company’s shareholders. Subject to customary closing conditions, the transaction is expected to close in the fourth quarter, according to a press release.

Under the terms of the agreement, holders of common shares of JCAP as well as those who hold operating company shares in Jernigan Capital Operating Co. LLC (the entity through which JCAP conducts its business as a investment) will receive $ 17.30 per share in cash. Holders of the company’s Series B preferred shares will receive $ 25 per share, plus accrued dividends, the release said.

“Since our IPO in March 2015, we have built from scratch a world-class portfolio of new ‘Generation V’ self-storage facilities in some of the best submarkets in the United States, with development that is the first of its kind in our industry, “said John Good, CEO and President of JCAP.” We believe this transaction with NexPoint validates the quality of the self-storage property portfolio and enterprise platform that we have built, and achieved the goal of maximizing value for our shareholders during a very difficult time for all of us. We are confident that today’s announcement is in the best interests of all JCAP stakeholders.

“NexPoint has long admired and supported Jernigan Capital’s unique self-storage business model and platform,” added Jim Dondero, Founder and President of NexPoint. “We plan to build on this vision as a private company, maintaining unmatched asset quality and continuing the current growth path. With our combined expertise, scale and financial strength, we are well positioned to deliver on this vision and further expand the company’s national footprint.

NexPoint has already shown interest in self-storage. As of December 2019, its affiliates had invested or loaned approximately $ 211 million in the industry, including a $ 125 million preferred stock investment in JCAP. Affiliates had also invested around $ 77.4 million in shares directly into self-storage developments, according to a Dec. 23 filing with the Securities and Exchange Commission, in which NexPoint Real Estate Finance Inc. (NREF) announced. his intention to initial public offering up to $ 115 million. NREF is a real estate investment trust (REIT) specializing in intermediary loans for hotel, multi-family, office and self-storage properties.

In February, JCAP acquired its partner interests in several self-storage properties. At the time, it owned, either alone or with its joint venture partner, 28 self-storage facilities representing 35.2% of the net rentable square feet of its investment portfolio.

Under its agreement with NexPoint, JCAP will end its regular quarterly dividends. While the company does not expect to host a conference call and webcast to discuss its financial results for the second quarter, it will still report its results on August 6, the statement said.

JCAP is a REIT listed on the New York Stock Exchange. The company provides finance to private developers, operators and owners of self-storage facilities, providing funds for acquisition, ground construction, major redevelopment or refinancing. The firm is managed externally by JCap Advisors LLC.

NexPoint is a registered advisor to a range of investment funds and offerings, including a closed-end fund, business development company, interval fund and various real estate vehicles. It is part of a multi-billion dollar global platform specializing in alternative investments.

Sources:
Memphis Business Journal, JCAP completes merger, acquired in $ 900 million cash transaction
Connect Texas, NexPoint signs $ 900 million deal for Jernigan Capital
Businesswire, Jernigan Capital Inc. Shareholders Approve NexPoint Acquisition
Jernigan Capital, Acquisition of Jernigan Capital by an affiliate of NexPoint Advisors LP for $ 17.30 per share in an all-cash transaction