American Realty Capital Properties Inc., a real estate investment trust which concentrates on owning single-tenant net lease commercial properties, has agreed to buy CapLease Inc., which is also a REIT, in a deal valued at $2.2 billion.
The deal calls for ARCP to pay $8.50 per share cash for each share of CapLease common stock. CapLease’s Series A, Series B and Series C preferred stock will be converted in the right to receive $25 in cash plus accrued and unpaid dividends. ARCP will also assume $580 million of CapLease’s $1.2 billion debt and pay off the remainder.
In April, ARCP was unsuccessful in
Nicholas Schorsch, chairman and CEO of ARCP, said the deal allows his company "to expand and further diversify our property portfolio, fortify our credit quality, reduce our tenant concentration and enhance our management team. This transaction is immediately accretive and is expected to generate approximately $0.11 per share in additional adjusted funds from operations annually and, upon closing, will allow us to increase our dividends to stockholders by $0.03 per share to an annualized rate of $0.94 per share.”
He added the combination would be the third largest net lease REIT in the nation.
ARCP added the increased size and scale resulting from the transaction further enhances its ability to execute large transactions and strengthens its position as an industry consolidator in the relatively fragmented market of net leased real estate.
CapLease has a “go-shop” period which expires on July 7 to find a better deal.
With the deal for 2013, the combination is projected to acquire an additional $800 million in assets, with the capacity to utilize $1.45 billion in unsecured financing through a term revolver with a 2.45% fixed interest rate.
