In order to facilitate lined up acquisition and pay off debt, BioMed Realty Trust, Inc. recently priced its public offering of 15 million shares at $21.40 per share. In a bid to cover over-allotments, this real estate investment trust (REIT) will provide a 30-day option to the underwriters for purchasing an additional 2,250,000 shares. The transaction is expected to close by Apr 2, 2013.
A cluster of eminent bankers acted as book-running managers. This includes - Morgan Stanley & Co. LLC of Morgan Stanley (MS - Analyst Report), Wells Fargo Securities, Raymond James & Associates, Inc. of Raymond James Financial, Inc. (RJF - Analyst Report), KeyBanc Capital Markets Inc., UBS Securities LLC of UBS AG (UBS - Analyst Report).
BioMed Realty expects to generate around $321.0 million from this offering. The net proceeds from the transaction is expected to be utilized mainly for funding the proposed acquisition of Wexford Science & Technology, LLC - a subsidiary of Wexford Equities, LLC. Also, BioMed intends to use the proceeds to repay outstanding debts under its unsecured credit facility and for other general corporate purposes.
As a matter of fact, on Mar 26, BioMed Realty inked a definitive deal to merge with Wexford Science & Technology, LLC. The strategic deal was part of the company’s goal to strengthen its position as the leading real estate provider to the life science industry. With the acquisition, BioMed Realty added 1.6 million square foot portfolio of Wexford Science & Technology. Post-acquisition, Wexford Science & Technology will operate as a wholly owned subsidiary of BioMed Realty.
For BioMed Realty, though the public offering would result in share dilution, the payment of debt is encouraging as it would reduce interest expenses. Moreover, the opportunistic acquisitions would help the company enhance its portfolio quality, which in turn would be accretive to its earnings going forward.
BioMed Realty focuses on providing real estate solutions to the life science industry in the United States. Its tenants primarily include biotechnology and pharmaceutical companies, scientific research institutions, government agencies, and other entities involved in the life science industry. Currently, BioMed Realty has interests in properties comprising approximately 13.2 million square feet of rentable space.
BioMed Realty currently retains a Zacks Rank #3 (Hold).