Back to top

Analyst Blog

In order to facilitate the funding of the recently announced strategic acquisitions of the $2.2 billion CapLease Inc. and the $807 million property portfolio from GE Capital, American Realty Capital Properties Inc. (ARCP - Snapshot Report) raised approximately $896 million as net proceeds through the placement of common stock and convertible preferred stock.

Initially, the placements were sized at $800 million, but were oversubscribed and upsized to $900 million. Specifically, the company vended around 29.4 million shares of its common stock at a price of $15.47 per share, generating gross proceeds of $455 million. The company also sold 28.4 million shares of 5.81% Series C convertible preferred stock having an aggregate liquidation preference of $445 million.

The acquisitions, which are expected to be accretive immediately to American Realty following their closure, would facilitate the company to become a fastest growing single tenant net lease REIT.

Particularly, the CapLease deal would help the company diversify and expand its portfolio, boost its credit quality, diversify the tenant base and bring on board an expert management team from CapLease.

On the other hand, the deal with GE Capital to acquire the $807 million portfolio would help capitalize on 471 net lease properties that boast several branded restaurants as tenants including Burger King Worldwide Inc. (BKW - Analyst Report) and The Wendy's Company (WEN - Analyst Report).

As a matter of fact, American Realty is focused on the acquisition and ownership of single tenant freestanding commercial properties subject to net leases with high credit quality tenants. The above-mentioned deals create pro forma enterprise value of approximately $6.9 billion for the company. With such a move, the company is expected to ride on the growth trajectory and benefit its shareholders simultaneously.

American Realty currently holds a Zacks Rank #4 (Sell).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.55 +11.64%
CHINA BIOLO… CBPO 55.57 +7.40%
BITAUTO HOL… BITA 96.14 +5.58%
LUXOFT HOLD… LXFT 38.77 +3.64%
INSITE VISI… INSV 0.30 +3.41%