Atlanta-based Johnstown American Cos. said Monday that it has agreed in principle to acquire Consolidated Capital Cos., an Emeryville, Calif.-based sponsor of real estate investment trusts, for about $200 million in cash and securities.
Johnstown, a publicly traded real estate service and property management firm, said it will pay an initial $50 million in cash and $50 million one year to two years after completion of the acquisition. In addition, it will issue $100 million in subordinated convertible notes to Consolidated's owners. If all of the notes are converted, the firm would issue a maximum of 16 million additional shares on top of the firm's current 11 million shares outstanding, said David John, executive vice president of Johnstown.
An additional $100 million for the acquisition could be paid out over a 10-year period if Consolidated meets certain profit goals each year, John said.
Consolidated Capital is privately held, with five investors holding more than half of its equity, said Daniel Blumberg, vice chairman. The firm earned $26 million pretax on revenues of $116 million in 1984.