The board of directors of NorthStar Realty Finance has approved a plan to spin-off its asset management business into a separate publicly traded company in the form of a tax-free distribution.
The distribution is expected to be completed in the second quarter of 2014 and will be comprised of common stock in NorthStar Asset Management.
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The newly formed company expected to be listed on the New York Stock Exchange.
In connection with the proposed spin-off, NorthStar Asset Management will enter into a 20-year management contract to manage NRF.
NorthStar Asset Management will also manage NRF’s non-traded REIT business and own its broker-dealer platform.
NorthStar chairman and CEO, David Hamamoto, said, "This transaction represents a fully aligned, long-term opportunity to unlock value for NRF shareholders through the creation of a leading asset-manager. NorthStar Asset Management will have a scalable operating platform with limited capital needs and a proven ability to grow."
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By GlobalData"This unique transaction crystalizes the value of NRF and its platform, and allows our shareholders to be the beneficiaries of a long-term contract to manage a diversified public company, a rapidly growing non-traded REIT platform and a broker-dealer," Hamamoto added.
