NEW YORK (The Deal) -- American Realty Capital Properties  (ARCP) said Wednesday it would sell its Cole Capital private capital management business to RCS Capital (RCAP) for at least $700 million.

Cole Capital, an investor in commercial real estate, was acquired by ARCP as part of its larger 2013 deal to buy Cole Real Estate Investments Inc. for $11.2 billion. ARCP said that as part of the deal announced Wednesday it would have the ability to participate in a series of real estate investment programs sponsored by Cole Capital, but said the sale would make it easier to raise capital and increase earnings visibility.

"This transaction significantly simplifies our business model, provides us a long-term economic stake in the growth and success of Cole Capital's investment programs and should enhance and accelerate the capitalization of these programs," said American Realty CEO David S. Kay. "As the leading wholesale distribution platform in the industry, RCAP is uniquely suited to increase the velocity and volume of Cole Capital's overall equity raising capabilities."

Terms of the deal call for RCS Capital to pay $200 million in cash and $300 million in unsecured debt maturing in 2021, as well as either 8.4 million shares of its stock or an additional $200 million in cash. There is also an earn-out provision of up to $130 million to be based on Cole Capital's 2015 Ebitda, with up to 50% payable in stock in 2016.

The purchase is expected to close before year's end, with funding of the purchase to occur in stages between late 2014 and April 2015 in part for tax reasons.

RCS Capital CEO Michael Weil in a statement called the purchase "strategically and financially important" for his company, helping to grow the business and expand its scope.

"It diversifies RCAP's revenues substantially, increases our recurring revenue base, and adds a full complement of net lease real estate offerings to our product suite," Weil said. RCAP said it expects Cole Capital to contribute recurring asset management Ebitda of more than $73 million in 2015.

ARCP was advised on the deal by Moelis & Co. LLC and Weil, Gotshal & Manges LLP's Michael Aiello, Matthew Gilroy, Chayim Neubort, Damian Ridealgh, Paul Wessel, Jeffrey Lieberman, John Sipple and Michael Epstein.

Barclays Capital Inc.; RCS Capital, the investment banking and capital markets division of Realty Capital Securities LLC; and Citigroup Inc. are acting as financial advisers to RCS Capital Corp., with Duane Morris LLP providing legal advice.

Proskauer Rose LLP is acting as transaction counsel to both ARCP and RCAP.