Amherst Residential, LLC entered into definitive agreement to acquire Front Yard Residential Corporation (NYSE:RESI) from a group of shareholders for approximately $690 million on February 17, 2020. Under the terms of agreement, Front Yard shareholders will receive $12.5 per share in cash without interest and subject to deduction for any required withholding tax, the transaction is valued at approximately $2.3 billion, including debt to be assumed or refinanced. All the holders of securities of Front Yard Residential Corporation, including options and restricted stock units will be entitled for the merger consideration. As a part of agreement, at closing, Amherst Residential affiliates and subsidiaries will acquire Front Yard's operating platform and assets, including approximately 15,000 SFR homes, currently managed by Front Yard's operator, HavenBrook Homes and beginning at closing, HavenBrook Homes' operations will be integrated with Main Street Renewal LLC, Amherst Residential's in-house operating company and the collective organization will retain the Main Street Renewal brand.

Amherst Residential has obtained equity and debt financing commitments for the transactions contemplated by the merger agreement, the proceeds of which will be used by Amherst Residential to pay the merger consideration and all related fees and expenses. Amherst Single Family Residential Partners VI, LP committed to provide cash equity to fund the merger consideration in an aggregate amount of $271.08 million. Amherst has also entered into a debt commitment letter dated as of February 17, 2020, with Goldman Sachs Bank USA (“GS”). Pursuant to and subject to the terms of the debt commitment letter, GS has committed to provide senior secured credit facilities to be used to pay a portion of the merger consideration payable under the merger agreement. Following the completion of the transaction, Front Yard will cease to be a publicly traded company and will become a wholly-owned subsidiary of Amherst Residential, LLC. A termination fee of $24 million will be paid by Front Yard to Amherst Residential and a reverse termination fee of $48 million will be paid by Amherst Residential to Front Yard, upon the termination of the merger agreement. The transaction is subject to existing lender consents and the approval of the holders of a majority of Front Yard's outstanding shares and the satisfaction of customary closing conditions. The Front Yard Board of Directors has unanimously approved the merger agreement and recommended the Front Yard shareholders vote in favor of it at a special meeting of stockholders. The Board of Directors of Amherst Residential also approved the agreement. As part of the transaction, shareholders representing approximately 18% of Front Yard's voting stock have agreed to vote in favor of the transaction. As of April 27, 2020, Front Yard shareholders approved the transaction. The transaction is expected to close in the second quarter of 2020.

Goldman Sachs &Co. LLC and Credit Suisse Securities (USA) LLC acted as financial advisors and Eduardo Gallardo of Gibson, Dunn & Crutcher LLP acted as legal advisor to Amherst Residential. Nancy Davey, John Bartling and Mahesh Srinivasan of Deutsche Bank Securities Inc. acted as financial advisors and fairness opinion providers and Michael Aiello, Sachin Kohli, Megan Pendleton, Gabriel Gregson, Shawn Kodes, Charan Sandhu, Mark Schwed, Paul Wessel, W. Michael Bond, Nellie Camerik, Annemargaret Connolly, Paul Overmyer, Eric Remijan, Craig Olshan, Adam Safwat, Vadim Brusser and Jonathan Cheng of Weil, Gotshal & Manges LLP acted as legal advisors to Front Yard. Innisfree M&A Incorporated acted as proxy solicitor for Front Yard and entitled to receive a fee of $45,000 for the services rendered. As compensation for Deutsche Bank's services in connection with the merger, Front Yard has agreed to pay to Deutsche Bank the following fees: (a) a strategic review fee of $0.5 million, payable upon the earlier of Front Yard's termination of the engagement letter or twelve months from the date of the engagement letter; (b) an opinion fee of $1 million which became payable upon Front Yard's delivery of Deutsche Bank's written opinion, which shall reduce the transaction fee paid in connection with the consummation of the merger or any fee payable pursuant to (c) below; (c) a sale transaction fee contingent on the consummation of the merger of (i) a fixed fee, payable at the time of closing, equal to $10 million and (ii) an additional fee of $2 million, payable at the sole discretion of the Board based on its assessment of Deutsche Bank's performance of its services pursuant to the engagement letter.

Amherst Residential, LLC cancelled the acquisition of Front Yard Residential Corporation (NYSE:RESI) from a group of shareholders on May 4, 2020. In connection with the termination of the merger agreement, Amherst Residential, LLC has agreed to pay a $25 million fee to Front Yard, purchase 4.4 million shares of Front Yard common stock in a primary issuance at $12.5 per share for an aggregate purchase price of $55 million and provide a $20 million committed two-year unsecured loan facility to Front Yard.