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NorthStar Asset Management, Colony Capital, and NorthStar Realty Finance to Create Colony NorthStar

NorthStar Asset Management Group Inc. (NYSE: NSAM), Colony Capital Inc. (NYSE: CLNY) and NorthStar Realty Finance Corp. (NYSE: NRF) have entered into a definitive merger agreement to create an internally-managed, diversified real estate and investment management platform. The combined company will be named Colony NorthStar Inc.

NSAM, which spun off from NorthStar Realty in July 2014, is the sponsor of NorthStar’s non-traded REITs and a significant minority owner of American Healthcare Investors – the cosponsor of the Griffin-American Healthcare REIT franchise.

The merger has been unanimously approved by the special committees of NSAM and NRF, and the board of directors of Colony.

Upon completion, NSAM shareholders will own approximately 32.85 percent, Colony shareholders will own approximately 33.25 percent and NRF shareholders will own approximately 33.90 percent of the combined company on a fully diluted basis.

NSAM shareholders will also receive, in addition to its regular quarterly dividend, a special cash dividend equal to $128 million, which represents a one-time distribution of excess NSAM taxable earnings and profits.

Thomas J. Barrack Jr. will serve as executive chairman of the board of directors of Colony NorthStar, David Hamamoto will be executive vice chairman, and Richard B. Saltzman will be chief executive officer.

“We are incredibly excited to merge with Colony to create a global real estate leader well positioned for long-term growth,” said David Hamamoto, executive chairman of NSAM and chairman of NRF. “This strategic combination is the next logical step for NSAM and NRF, creating substantial value for shareholders and transforming the companies into a world-class, internally-managed equity REIT that includes a sizable, established institutional and retail asset management platform.”

He added, “We are confident that Colony NorthStar with its lower leverage, larger balance sheet and improved liquidity profile is poised for meaningful multiple expansion and substantially enhanced long-term returns for shareholders.”

The companies stated that the transaction delivers a number of strategic and financial benefits, including creating a diversified equity REIT with $58 billion of assets under management led by a seasoned management team, a larger more diversified investment portfolio, and $115 million in cost savings annually.

The merger is expected to close during the first quarter of 2017, subject to customary closing conditions and approval by the NSAM, Colony and NRF shareholders.

NorthStar Asset Management Group Inc. is an asset management firm focused on managing real estate and other investment platforms in the United States and internationally.

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