U.S. investment giant Blackstone has agreed to acquire Canada’s Tricon Residential for US$3.5 billion and take the company private, the firms announced Friday.

Blackstone Real Estate Partners X and Blackstone Real Estate Income Trust, Inc. (BREIT) will acquire all outstanding common shares of Toronto-based Tricon for US$11.25 (approximately C$15.17) per common share in cash.

Upon the deal’s completion, BREIT will maintain its approximately 11% ownership stake in Tricon. 

Founded in 1988, Tricon ranks among Toronto’s largest rental apartment owners. The company has US$2.5 billion of apartment buildings under development in the Ontario capital.

Most of Tricon’s assets are located in the U.S. All of the firm’s Canadian assets are based in Toronto. The company’s Canadian multi-family development platform is building approximately 5,500 market-rate and affordable multi-family rental apartments.

The Canadian portfolio includes retail and office assets within mixed-use properties that include residential components.

In the U.S., Tricon serves communities in high-growth sunbelt markets such as Atlanta, Charlotte, Dallas, Tampa and Phoenix. In addition to managing a single-family rental housing portfolio, Tricon has a single-family rental development platform with approximately 2,500 houses under development, along with numerous land development projects that can support the future development of nearly 21,000 single-family homes.

Under Blackstone’s ownership, Tricon plans to complete its US$1-billion development pipeline of new single-family rental homes in the U.S. and US$2.5 billion of new apartments in Canada. The company will also continue to enhance the quality of existing single-family homes in the U.S. through an additional US$1 billion of planned capital projects.

“We are proud of the significant and immediate value that this transaction will deliver to our shareholders, while allowing us to continue providing an exceptional rental experience for our residents,” said Gary Berman, president and CEO of Tricon in a news release “Blackstone shares our values and our unwavering commitment to resident satisfaction, and we look forward to benefitting from their expertise and capital as we partner in building thriving communities.”

Morgan Stanley and RBC Capital Markets are acting as financial advisors to Tricon. Scotiabank is acting as independent financial advisor and independent valuator to a Tricon board’s special committee of independent directors who unanimously recommended that shareholders accept the deal.

Goodmans LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as legal counsel to Tricon in connection with the transaction and Osler, Hoskin & Harcourt LLP is acting as independent legal counsel to the special committee.

BofA Securities, Deutsche Bank Securities Inc., J.P. Morgan Securities and Wells Fargo are acting as Blackstone’s financial advisors. Simpson Thacher & Bartlett LLP and Davies Ward Phillips & Vineberg LLP are providing legal counsel.

Tricon is slated to delist from the Toronto and New York stock exchanges.

With files from Paul Bubny

Pictured: Tricon’s Canary Landing property in Toronto