NEW YORK (TheStreet) ¿¿ Just months after being rebuffed by its target, American Realty Capital Properties (ARCP) on Wednesday announced it has an agreement in place to acquire Cole Real Estate Investments (COLE) in a deal valued at $11.2 billion.
Terms of the deal call for New York based ARCP, an acquisitive commercial property REIT, to pay either 1.0929 shares or $13.82 in cash for each share of Cole. Based on ARCP¿s Oct. 22 closing price, the stock offer is worth $14.59 per share, a premium of 13.8% to Cole¿s Tuesday close.
Cole, of Phoenix, is a buyer and manager of retail, office and industrial properties. ARCP said the combination would create the world¿s largest net lease REIT with an enterprise value of $21.5 billion, 3,732 properties and 102 million square feet in 49 states and Puerto Rico. The company also expects to extract $70 million in synergies in the first year of combined ownership.
¿By leveraging our successful track records, our complementary businesses and highly skilled professionals, we are confident that we will be well-positioned to achieve continued growth,¿ ARCP chairman and CEO Nicholas S. Schorsch said in a statement. ¿Far more can be accomplished by these two great companies working together than either one could have hoped to achieve independently.¿
The deal ends a long pursuit of Cole by ARCP, which in March went public with a $9.7 billion offer to acquire what was then known as Cole Credit Property Trust III Inc. The target, which at the time was not publicly traded, rejected the offer in favor of its plan to merge with Cole Holdings, its external adviser, and seek a public listing soon after. Cole went public on June 20, opening at $11.50 per share.
The Cole deal continues a busy year for ARCP. The REIT in July announced plans to buy American Realty Capital Trust IV, a nontraded real estate investment trust managed by ARCP executives, for $3.1 billion, and in May said it would buy CapLease for $2.2 billion and two portfolios of retail properties from GE Capital for a combined $807 million.
A Barclays team of Steve Wolitzer, Rick Landgarten, Schecky Schechner and Lisa E. Beeson joined with RCS Capital to provide financial advice to ARCP, with Proskauer Rose serving as legal counsel.
Goldman Sachs, Wachtell, Lipton, Rosen & Katz, Venable and Morris, Manning and Martin are advising Cole.
A Sullivan & Cromwell team led by partners Alison Ressler and Benjamin Weber and including Ann Chen, Matthew Friestedt, Andrew Mason, Henrik Patel, Georg Kraus-Vilmar, Gideon Rov, Jane Wang, Henrik Patel, Jeanette Braun and Guy Inbar are acting as special counsel to Christopher Cole and certain other executives in connection with the transaction.
--Written by Lou Whiteman in New York