AMERICAN Realty Capital Properties (ARCP) said yesterday it would buy American Realty Capital Trust IV (ARCT) for $3.1bn (£2.04bn) in cash and stock to expand in the net-lease sector, where tenants pay most of the operating costs.
The deal will put ARCP on track to become the second-largest net-lease real estate investment trust with an enterprise value of $10bn.
Net-leased properties are attractive to investors because tenants pick up most of the operating costs and the properties are leased for long periods, resembling a high-dividend bond.
Both ARCP and ARCT are owned by the American Realty Capital group, which also sponsors five other public non-traded real estate securities offerings.
According to the terms of the deal, each ARCT shareholder will either receive $30 in cash or 2.05 shares of ARCP’s common stock, valuing the offer at $30.34 per share based on ARCP’s Monday close of $14.80.
The acquisition is expected to close by the third quarter ending September, ARCP said.
The company also raised its annualised dividend to 94 cents per share from 91 cents.
“Today’s announced merger solidifies our leadership position in the net-lease real estate sector,” said Nicholas Schorsch, the chairman and chief executive of both companies.
City A.M. Reporter