RMR 8-K
Rmr Group Inc. (RMR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
As disclosed in the Current Report on Form 8-K filed with the United States Securities and Exchange Commission (the “SEC”) by The RMR Group Inc. (the “Company”), on July 31, 2023, The RMR Group LLC (“RMR LLC”), a Maryland limited liability company and a majority-owned operating subsidiary of the Company, entered into an equity purchase agreement (the “Purchase Agreement”), with MPC Partnership Holdings LLC, a Georgia limited liability company (“MPC”), the sellers set forth on the signature pages thereto (collectively, the “Sellers”), the seller owners set forth on the signature pages thereto (collectively, the “Seller Owners”), and, solely in his capacity as the Seller Representative, James A. Rubright. On December 19, 2023, RMR LLC completed its acquisition of the issued and outstanding equity interests of MPC for $80 million in cash, subject to customary adjustments for MPC’s cash, debt, transaction expenses and working capital at closing. Pursuant to the Purchase Agreement, the Sellers are eligible to earn up to an additional $20 million of contingent consideration subject to the deployment of capital remaining in investment funds managed by MPC prior to the end of such fund’s investment period. In addition, the Sellers retained certain excluded assets (including promotes and co-investment interests in respect of legacy investment funds managed by MPC) and assumed certain excluded liabilities (including liabilities related to such excluded assets), in accordance with the Purchase Agreement.
In connection with the transaction, Mr. Patrick Carroll entered into a business protection agreement providing customary non-competition, non-solicitation and related covenants in favor of RMR LLC.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Purchase Agreement attached as Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC by the Company on July 31, 2023 and incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On December 19, 2023, the Company issued a press release announcing the Closing. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The Company undertakes no obligation to update, supplement or amend the press release attached as Exhibits 99.1.
The information in Exhibits 99.1 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements of Businesses Acquired.
(a) Financial Statements of Business Acquired.
The financial statements required by this Item, with respect to the acquisition described in Item 2.01 herein, will be filed by amendment to this Current Report on Form 8-K not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed pursuant to Item 2.01.
(b) Pro Forma Financial Information.
The unaudited pro forma financial information required by this Item, with respect to the acquisition described in Item 2.01 herein, will be filed by amendment to this Current Report on Form 8-K as soon as practicable and in any event not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed pursuant to Item 2.01.
(d) Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| THE RMR GROUP INC. | ||
| Dated: December 19, 2023 | By: | /s/ Matthew P. Jordan |
| Matthew P. Jordan | ||
| Executive Vice President, Chief Financial Officer and Treasurer | ||
Exhibit 99.1
FOR IMMEDIATE RELEASE
The RMR Group Completes Acquisition of
CARROLL Multifamily Platform
Accretive Transaction Expands RMR’s Expertise and Private Capital AUM
Newton, MA. (December 19, 2023): The RMR Group (Nasdaq: RMR) today announced that it has completed its acquisition of MPC Partnership Holdings, LLC, doing business as CARROLL (“CARROLL”), a vertically integrated multifamily platform. The acquisition, which was announced on July 31, 2023, expands RMR’s platform to include multifamily commercial real estate, the only major property sector in which RMR did not have a significant presence, increases its private capital assets under management and diversifies its roster of private capital clients.
Adam Portnoy, President and Chief Executive Officer of RMR, made the following statement:
“With the CARROLL acquisition, RMR was able to implement our growth strategy of leveraging our strong balance sheet to make strategic acquisitions. Today, we acquired a vertically integrated organization that expands our scale, diversifies our platform, substantially increases our private capital assets under management and is financially accretive. I welcome the experienced and talented CARROLL team to RMR and look forward to working with them to further expand our multifamily platform.
“With more than $200 million in cash remaining after completing the CARROLL acquisition and no debt, RMR is well-positioned to pursue additional growth opportunities that deliver attractive risk adjusted returns for our shareholders.”
Transaction Details
RMR acquired 100% of the equity interests in CARROLL for $80 million in cash, subject to customary purchase price adjustments, with the potential for incremental earnout consideration up to $20 million based on the deployment of the remaining capital commitments of the existing CARROLL investment funds. Consents approving the transaction were received from all limited partners, joint venture partners and lenders to the extent that their consent was required in connection with the transaction.
Advisors
The CenterCap Group, LLC served as exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to RMR on this transaction. UBS Investment Bank served as exclusive financial advisor and King & Spalding LLP served as legal advisor to CARROLL.
About The RMR Group:
The RMR Group is a leading U.S. alternative asset management company, unique for its focus on commercial real estate (CRE) and related businesses. RMR’s vertical integration is supported by over 600 real estate professionals in more than 30 offices nationwide who manage approximately $36 billion in assets under management and leverage more than 35 years of institutional experience in buying, selling, financing and operating CRE. RMR benefits from a scalable platform, a deep and experienced management team and a diversity of direct real estate strategies across its clients. RMR is headquartered in Newton, MA and was founded in 1986. For more information, please visit www.rmrgroup.com.
WARNING REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements that are within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to subject to risks and uncertainties. These statements may include words such as “believe,” “could,” “driving,” “estimate,” “expect,” “goal,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “will,” “would,” “considering,” and negative or derivatives of these or similar expressions. Forward-looking statements include, without limitation, statements regarding the transaction, prospective performance, future plans, events, expectations, performance, objectives and opportunities and the outlook for CARROLL’s business and the accuracy of any assumptions underlying any of the foregoing. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those currently anticipated due to a number of risks and uncertainties. The transaction is subject to various additional risks, including: the risk that the business will not be integrated successfully or that the integration will be more costly or more time-consuming and complex than anticipated; the risk that cost savings and synergies anticipated to be realized by the transaction may not be fully realized or may take longer to realize than expected; risks related to future opportunities, plans and strategy for CARROLL, including the uncertainty of expected future financial performance, expected access to capital, timing of accretion and operating results of RMR following completion of the transaction and the challenges facing the industries in which RMR and CARROLL operate; the risk that the transaction will divert management’s attention from RMR’s ongoing business operations; risks associated with the impact of general economic, political and market factors on us, CARROLL or the transaction; and other matters. These factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in RMR’s periodic filings. The information contained in RMR’s filings with the Securities and Exchange Commission (“SEC”), including under the caption “Risk Factors” in its periodic reports, or incorporated therein, identifies important factors that could cause differences from the forward-looking statements in this press release. RMR’s filings with the SEC are available on its website and at www.sec.gov. You should not place undue reliance on forward-looking statements. Except as required by law, RMR undertakes no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
| Contact: | |
| Kevin Barry, Senior Director, Investor Relations | |
| (617) 658-0776 | |
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