Cole Holdings to Be Acquired by REIT It Sponsors

Cole Holdings Corp., a manager of a more than 2,000 U.S. commercial buildings, agreed to be acquired by one of the real estate investment trusts it sponsors.

Cole Credit Property Trust III Inc., a nonlisted REIT, will make an initial payment of $20 million in cash and 10.7 million shares of its stock for Cole Holdings, which manages more than $12 billion for more than 160,000 individual investors, the Phoenix-based firms said today in a statement. The combined company will be called Cole Real Estate Investments Inc. and will seek to list its shares on the New York Stock Exchange.

“CCPT III will be able to increase its dividend payout and intends to now pursue the listing of its common stock to achieve greater liquidity and superior access to the capital markets,” Leonard Wood, chairman of a special committee of Cole Credit’s board, said in the statement.

The deal is expected to be completed in the second quarter.

Cole Credit agreed to pay an additional 2.1 million shares to Cole Holdings after listing on the NYSE, according to the statement. Additional stock would be payable in 2017 under certain conditions, including how the combined company’s shares perform relative to its peers.

Christopher Cole was listed as the sole shareholder of Cole Holdings in a proxy filing last year by Cole Credit Property Trust III, of which he is chief executive officer.

Cole Credit Property Trust III owns about 1,000 single-tenant office, retail and industrial properties in the U.S., according to today’s statement. The REIT is externally managed by affiliates of Cole Holdings.

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