The RMR Group Inc. (NasdaqCM:RMR) agreed to acquire MPC PARTNERSHIP HOLDINGS LLC from James A. Rubright for approximately $100 million on July 29, 2023. RMR LLC will acquire all of the issued and outstanding equity interests of MPC for $80 million in cash, subject to customary adjustments for cash, debt, transaction expenses, working capital, and property management revenue at closing, plus 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. RMR LLC expects to pay the consideration from its available cash on hand. James A. Rubright have agreed to retain certain excluded assets (including promotes and co-investment interests in respect of legacy investment funds managed by MPC) and assume certain excluded liabilities. The transaction price, excluding contingent earnout consideration, reflects an implied valuation of 11.4x to 13.3x of CARROLL?s recurring 2024 EBITDA and 6.2x to 7.3x of CARROLL?s recurring 2024 EBITDA adjusted for potential synergies. In the first full year of operations post closing, RMR expects the CARROLL platform to generate more than $35 million in recurring fees and approximately $11 million to $13 million of Adjusted EBITDA, including $5 million to $6 million of synergies. Post transaction, RMR expects to have no debt and approximately $200 million of cash on hand for further opportunistic growth strategies.

Consummation of the Acquisition is subject to customary conditions, including, among others, (i) MPC obtaining all required consents with respect to managed funds, joint-venture investors and applicable lenders with respect to its managed properties, (ii) MPC?s revenues from its property management agreements at the time the Acquisition is consummated being not less than 85% of an agreed upon baseline property management revenue and (iii) the absence of any Material Adverse Effect. The transaction, which was unanimously approved by RMR?s Board of Directors, is expected to close in the fall of 2023, subject to customary conditions, primarily obtaining limited partner, joint venture partner and lender consents. The Purchase Agreement contains customary termination provisions, including if the Acquisition has not been consummated by March 29, 2024. As of December 19, 2023, 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.

The CenterCap Group, LLC is serving as the exclusive financial advisor and Faiz Ahmad, Heather Cruz, Peter Mair and Anoush D. Sarkissian of Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to RMR on this transaction. UBS Investment Bank is acting as the exclusive financial advisor and Gibbs Patton Fryer and Spencer Johnson of King & Spalding LLP is acting as the legal advisor to CARROLL.

The RMR Group Inc. (NasdaqCM:RMR) completed the acquisition of MPC PARTNERSHIP HOLDINGS LLC from James A. Rubright on December 19, 2023.