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Spirit Realty Capital And Cole Credit Property Trust II To Merge To Create Second Largest Publicly Traded Triple-Net-Lease REIT With A Pro Forma Enterprise Value Of $7.1 Billion

Stocks in this article: SRC

Spirit Realty Capital, Inc. (NYSE: SRC), (“Spirit Realty”), and Cole Credit Property Trust II (“CCPT II”) announced today that their Boards of Directors have unanimously approved a definitive agreement to merge their companies to create the second largest publicly traded triple-net-lease REIT in the United States with a pro forma enterprise value of approximately $7.1 billion.

The combined company, which will retain the Spirit Realty name and trade on the New York Stock Exchange under the ticker symbol “SRC,” will own or have an interest in 2,012 properties in 48 states. It will have a significantly enhanced scale and scope, a more broadly diversified portfolio of high-quality real estate assets and enhanced access to capital. The current management team of Spirit Realty will lead the combined company. The transaction is expected to close in the third quarter of 2013.

“This merger significantly accelerates Spirit Realty’s business strategy and better positions us to deliver long-term value to our shareholders,” said Thomas H. Nolan, Jr., Chairman and Chief Executive Officer of Spirit Realty. “CCPT II’s portfolio represents one of the largest and highest-quality portfolios of net lease assets. The addition of CCPT II’s portfolio effectively doubles the size of our portfolio. As a result, the merger further diversifies us both geographically and by industry, reduces our tenant concentration, improves the overall credit quality of our portfolio and increases operating efficiency. We also expect the merger to enhance our access to the capital markets and better position us to take advantage of consolidation opportunities in the net lease space. We are excited about the outlook for the triple-net industry and about our position in it, and we look forward to delivering attractive and stable value to shareholders of our combined company.”

Christopher H. Cole, Founder and Executive Chairman of Cole, said “The independent directors of the CCPT II Board, with the assistance of legal and financial advisors, thoroughly evaluated potential options to maximize value for our shareholders. We are confident that this transaction is in the best interest of all shareholders. As of the date of this announcement, it represents a positive cumulative total return on their investment and provides an opportunity for liquidity in what will be one of the largest publicly traded net lease REITs. Despite operating through a challenging time in the real estate cycle, we are pleased with the value this provides our investors. Our disciplined investment philosophy of acquiring high-quality, income producing properties, net-leased to long term creditworthy tenants, was the foundation that allowed the CCPT II portfolio of assets to deliver great results. With this transaction, Spirit Realty shareholders will own a best-in-class portfolio.”

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