American Realty Capital Properties Inc. (ARCP) agreed to buy American Realty Capital Trust III Inc., a non-traded real estate investment trust, to expand its holdings of properties leased to single tenants.
American Realty Capital Trust III shareholders may receive $12 a share in cash or 0.95 of a share of American Realty Capital Properties, equal to $12.26 based on the Dec. 14 closing price, New York-based American Realty Capital Properties said in a statement today. The cash consideration will be capped at 30 percent of American Realty Capital Trust shares outstanding.
American Realty Capital Trust III, based in New York, had about 134 million common shares outstanding at the end of September, according to a regulatory filing, suggesting a deal value of about $1.6 billion.
The combined company will have more than 800 properties leased to single tenants such as Walgreen Co. (WAG) and Dollar General Corp. (DG) in 44 states, according to the statement. The deal is expected to be completed during the second quarter of 2013.
“This transformative transaction will combine the best aspects of both investment strategies and will give the combined company greater access to more attractive financing, inclusion in the important indices, and allow us access to lowest cost capital,” Michael Weil, chief operating officer of American Realty Capital Trust, said in the statement.
Both companies are managed by affiliates of American Realty Capital, a New York-based real estate investor. American Realty Capital Properties started trading on the Nasdaq market in September 2011. Nicholas Schorsch is chairman and chief executive officer of each of the entities, according to regulatory filings.
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