San Francisco-based industrial real estate investment trust (REIT) Prologis Inc. (PLD - Analyst Report) recently initiated an at-the-market (ATM) equity-offering program. The company plans to sell shares up to $750 million aggregate offering price, from time to time, based on market conditions and capital requirements.
BofA Merrill Lynch, a corporate and investment banking division of Bank of America Corporation (BAC - Analyst Report) and Citigroup Global Markets Inc., an operating arm of Citigroup, Inc. (C - Analyst Report) will support Prologis as the managers for the ATM offering.
Prologis plans to use net proceeds from the shares sale for general corporate purposes – such as funding proposed acquisitions and investments as well as reducing the debt level.
We believe that the above-mentioned transaction by Prologis will provide it financial flexibility and position it favorably to pursue expansion opportunities, which will go a long way in enhancing top-line growth. Notably, Prologis have been riding on a growth trajectory lately, by joining hands with various retailers for build-to-suit deals. However, the share dilution impact cannot be ignored.
Last week, the company penned a deal with a retailer for a build-to-suit facility in Poland. Spanning 376,000 square feet, this distribution center represents the fourth build-to-suit project in less than two years at Prologis Park Wroclaw V.
In March 2013, Prologis penned a new build-to-suit agreement with end-to-end e-Commerce service provider – SpeedFC – a subsidiary of Navarre Corp. . The agreement is for a distribution center spanning 770,000 square feet in Etna, Ohio.
Prologis currently carries a Zacks Rank #3 (Hold).