Back to top

American Realty Raises Cap to Fund Buy-Outs

Read MoreHide Full Article

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. 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. and The Wendy's Company (WEN - Free 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).

Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Wendy's Company (The) (WEN) - free report >>

More from Zacks Analyst Blog

You May Like