Safehold Inc. New · NYSE:SAFE
Safehold Inc. New — iStar — Merger or Acquisition (August 2022)
14 slides from Safehold Inc. New's merger presentation, Aug 11, 2022
Slide 1: iStar & Safehold: The Culmination of a Multi-Year Strategy
iStar & Safehold The Culmination of a Multi - Year Strategy August 2022
Slide 2: Forward-Looking Statements and Other Matters
2 Forward - Looking Statements and Other Matters Forward - Looking Statements Certain matters discussed in this document may be forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 . We have tried, whenever possible, to identify these statements by
Slide 3: The Culmination of a Multi-Year Strategy
In February 2019, iStar announced a redefined strategy with a focus on growing the ground lease ecosystem and monetizing its non - core assets . This strategy has yielded strong results to date, most recently with the sale of the Net Lease portfolio for over $3 billion, generating a $585 million gai
Slide 4: Executive Summary
Shares in a Stronger New Safehold This transaction will materially strengthen New Safehold and position it for future growth and increased valuation as the only self - managed, pure - play ground lease company in the public markets Shares in a Focused SpinCo SpinCo will have the ability to focus on
Slide 5: Safehold will acquire management company, launch fund business, implement transitional arrangements
Safehold will: Acquire Management Company Safehold internalizes and as part of the transaction effectively assumes $100m L+150 Trust Preferred due 2035 from iStar and effectively issues 1.2m of new SAFE shares to iStar (1) Launch Fund Management Business Acquire iStar’s interest in its two ground le
Slide 6: Stronger Safehold: The Future of iStar is SAFE
6 Stronger Safehold: The Future of iStar is SAFE Accretive outcome that best positions New Safehold to expand its market leading position Enhances governance, widely distributes voting power, expands number of independent directors on Board Internalizes and better aligns management team which helped
Slide 7: Stronger Safehold: MSD Partners to Become One Of New Safehold's Largest Shareholders
7 Stronger Safehold: MSD Partners to Become One Of New Safehold’s Largest Shareholders and Caret’s Largest Third - Party Investor • MSD Partners will buy 5.4m shares of SAFE in a direct sale from iStar o $200m investment represents $37 per share o iStar will use the proceeds to repay debt o Enhances
Slide 8: Stronger Safehold: iStar's Investment in Safehold
8 Stronger Safehold: iStar’s Investment in Safehold iStar’s ownership in Safehold will effectively be distributed to shareholders, after a portion of the shares are contributed to SpinCo, distributed to management (which satisfies iStar’s long - term incentive plan) and sold to MSD Partners Contribu
Slide 9: SpinCo Overview
9 SpinCo will be an independent company with interests in real estate assets and SAFE stock The structure of SpinCo will allow iStar shareholders to retain certain longer - term assets in order to facilitate a more efficient monetization Company Overview Benefits x Maximizes value of iStar’s remaini
Slide 10: SpinCo: Transitional Arrangements
10 SpinCo: Transitional Arrangements The loan to SpinCo is a transitional arrangement to help accomplish internalization Amount (1) $100m LTV (2) <20% Term 4 years Interest Rate 8.0% cash pay Collateral ~$400m of SAFE shares (separately encumbered with up to $140m of secured debt), ~$350m book value
Slide 11: Sources and Uses
11 Sources Available Cash $1.4 Asset Monetization 0.4 MSD Partners Purchase of SAFE Stock 0.2 Ground Lease Plus and Leasehold Loans Funds Sold to New Safehold 0.1 New Safehold Loan to SpinCo 0.1 Bank Loan to SpinCo (SAFE Shares) 0.1 Total $2.3 iStar will use available cash and proceeds from the mone
Slide 12: iStar to SpinCo Bridge
12 The transaction will result in SpinCo having an asset base of approximately $800m and total debt of up to $240m after the various steps leading up to transaction close iStar (Current) Transaction Impact SpinCo (Pro Forma) Cash $1.4 ($1.3) $0.1 SAFE Stock (1) 1.7 (1.3) 0.4 GL+ / LHL Fund 0.1 (0.1)
Slide 13: SpinCo Consideration per iStar Shareholder
Total: $18.39 / sh (2) 13 SAFE Shares Asset: $400m Less Debt: 140m Equity: 260m $ / sh : $3.01 Real Estate Asset: $350m Less Debt: 100m Equity: 250m $ / sh : $2.89 Cash Asset: $50m Less Debt: - Equity: 50m $ / sh : $0.58 SpinCo Consideration per iStar Shareholder The transaction provides iStar share
Slide 14: Appendix: Transaction Summary
14 Appendix: Transaction Summary Transaction Structure • Safehold acquires iStar’s management platform and iStar’s interests in its two ground lease ecosystem funds • iStar spins off remaining non - ground lease assets, $400m of Safehold stock and at least $50m of cash into SpinCo, a separate pub li