American Realty Capital Properties has reached an agreement to acquire Cole Real Estate Investments for $11.2 billion, the companies announced today. The resulting combined portfolio includes 3,732 properties and 102 million s/f of space.
“This merger represents a new beginning for former competitors, and we look forward to uniting two of the industry’s most talented organizations,” Nick Schorsch, ARCP’s chairman and CEO, said in a press release.
The planned merger would create the largest net lease REIT with an enterprise value of $21.5 billion, according to the companies’ announcement, and the merged firm would be 64 percent larger than the closest comparable net lease REIT.
The deal has been unanimously approved by the board of directors of each company but is still subject to customary closing conditions, including stockholder votes.
ARCP has secured $2.75 billion of fully committed financing from Barclays in connection with the transaction, which it says is expected to close in the first half of 2014.
“”We are pleased to have reached this agreement with ARCP, which we believe provides compelling value and significant equity upside potential for Cole stockholders at a time when we believe the industry is consolidating… Our two companies are far better and more powerful together than apart,” Christopher H. Cole, founder and executive chairman of Cole Real Estate Investments, said in the press release.
Barclays and RCS Capital, the investment banking division of Realty Capital Securities, LLC, are acting as financial advisors to ARCP and team led by Peter Fass at Proskauer Rose LLP is acting as legal counsel to ARCP. Goldman, Sachs & Co. is acting as exclusive financial advisor to Cole, Wachtell, Lipton, Rosen & Katz, Venable LLP and Morris, Manning and Martin, LLP are acting as legal counsel to Cole, and Sullivan & Cromwell LLP is acting as special counsel to Christopher Cole and certain other executives in connection with the transaction.