SYS-CON MEDIA Authors: Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel, Peter Silva

News Feed Item

American Realty Capital Properties Completes Acquisition of American Realty Capital Trust IV

$3.0 Billion Merger Creates the Leading Net Lease REIT with Enterprise Value of $10 Billion

NEW YORK, Jan. 3, 2014 /PRNewswire/ -- American Realty Capital Properties, Inc. ("ARCP") (NASDAQ: ARCP) today closed its previously announced transaction to acquire American Realty Capital Trust IV, Inc. ("ARCT IV"), following the approval of the transaction by ARCT IV stockholders at ARCT IV's special meeting. 99.0% of the ARCT IV shares voted were voted in favor the merger, representing 67.0% of all ARCT IV shares eligible to vote.

(Logo: http://photos.prnewswire.com/prnh/20120529/NY15147LOGO)

Under the terms of the merger agreement, as amended, ARCP issued the following consideration to ARCT IV stockholders for each ARCT IV share: (1) $9.00 in cash; (2) 0.5190 of a share of ARCP common stock (valued at $6.68 using the ARCP closing price of $12.87 on January 2, 2014, the trading day prior to the closing of the merger and representing 21.9% of the total nominal consideration); and (3) 0.5937 shares of ARCP's 6.70% Series F Cumulative Redeemable Preferred Stock ("Series F Preferred Stock") (NASDAQ: ARCPP) (valued at $14.84 based on a liquidation preference of $25.00 per share of perpetual preferred stock and representing 48.6% of the total nominal consideration), for a fixed nominal consideration, as of January 2, 2014, of $30.52.  ARCP issued 36.9 million shares of common stock and 42.2 million shares of Series F Preferred Stock to former ARCT IV stockholders at the closing of the merger.

ARCP expects the Series F Preferred Stock to commence trading on the NASDAQ Global Select Market on Monday, January 6, 2014, the first full trading day following the closing of the merger. ARCP expects newly issued common shares to be available in former ARCT IV stockholders' accounts on Monday, January 6, 2014 as well.

Nicholas S. Schorsch, Chairman & CEO of ARCP, commented, "Closing this acquisition is part of our announced strategy to continue building the leading publicly-traded net lease REIT, substantially augmenting the size of our company without sacrificing credit quality, lease duration or asset strength.  Our transition to self-management should further enable us to build shareholder value combining a broad-based, high quality, diversified portfolio of net lease real estate assets with the finest intellectual capital in the industry."

Added David Kay, President of ARCP, "We expect to complete our transition to self-management on January 8, 2014. The ARCT IV acquisition not only expands the size of our portfolio, but strengthens the composition of credit tenants in our portfolio.  This positions us to protect our investors' capital and generate returns to our investors through growth in rents and asset appreciation, and thus providing durable income. Additionally, we issued more than $1.5 billion of common and preferred securities in connection with the closing, allowing us to further deleverage our balance sheet, which is consistent with our focus on making accretive acquisitions."

Brian S. Block, ARCP's Chief Financial Officer, said, "This transaction is instrumental to achieving 2014 AFFO growth per share, and will reduce our balance sheet leverage with ARCT IV's highly unencumbered portfolio of real estate assets. As we previously announced, our 2014 AFFO guidance ranges from $1.13 per share to $1.19, in conjunction with this transaction along with other previously announced transactions."

Dividends

ARCT IV stockholders will participate in ARCP's January 2014 dividend to be paid at an annualized rate of $0.94 per share and will be entitled to cumulative dividends on the Series F Preferred Stock at a rate of 6.70% of the liquidation preference per share of $25.00 (equivalent to an annual rate of $1.675 per share).

Transfer of Shares

ARCT IV stockholders will receive 0.5190 of a share of ARCP common stock per ARCT IV share and 0.5937 of a share of Series F Preferred Stock per ARCT IV share. The transfer of ARCT IV stockholders' shares to ARCP's current transfer agent, Computershare, Inc., is expected to be completed 1 to 3 business days following the closing of the merger. Once ARCT IV stockholders' shares are transferred to Computershare, each stockholder will have the option to hold those shares with the transfer agent or transfer the shares to a brokerage account of their choice. The newly issued Series F Preferred Stock received by ARCT IV stockholders are expected to begin trading on the NASDAQ Global Select Market on January 6, 2014. ARCP expects newly issued common shares to be available in former ARCT IV stockholders' accounts on Monday, January 6, 2014 as well.

Post-Merger Portfolio Information

Including the close of the ARCT IV transaction, ARCP's portfolio consists of 2,560 freestanding commercial properties, net-leased to 452 primarily investment grade rated and other credit tenants, totaling approximately 43.7 million square feet located in 49 states, the District of Columbia and Puerto Rico. The portfolio will operate in 46 distinct industries and will have an average remaining lease duration of approximately 9.3 years. Approximately 56% of the anticipated lease revenue will be generated by investment grade and other credit tenants.

Addition of William G. Stanley to ARCP's Board of Directors

Following the untimely death of Dr. Walter P. Lomax, Jr. in October 2013, ARCP's board of directors appointed William G. Stanley, the lead independent director of ARCT IV prior to the merger close, as an independent director of ARCP effective upon the closing of the ARCT IV merger to ensure that the ARCP board would be comprised of a majority of independent directors and in light of Mr. Stanley's leadership skills and ample experience as an independent director on various boards. Mr. Stanley joined Leslie D. Michelson, Scott J. Bowman and Governor Edward G. Rendell as independent board members of ARCP along with the three interested board members, Nicholas S. Schorsch, Chairman, William M. Kahane and Edward M. Weil, Jr.

About ARCP

ARCP is a publicly traded Maryland corporation listed on The NASDAQ Global Select Market, focused on acquiring and owning single tenant freestanding commercial properties subject to net leases with high credit quality tenants. Additional information about ARCP can be found on its website at www.arcpreit.com. ARCP may disseminate important information regarding it and its operations, including financial information, through social media platforms such as Twitter, Facebook and LinkedIn.

Funds from Operations and Adjusted Funds from Operations

ARCP considers funds from operations ("FFO") and AFFO, which is FFO as adjusted to exclude acquisition-related fees and expenses, amortization of above-market lease assets and liabilities, amortization of deferred financing costs, straight-line rent, non-cash mark-to-market adjustments, amortization of restricted stock, non-cash compensation and gains and losses useful indicators of the performance of a real estate investment trust ("REIT"). Because FFO calculations exclude such factors as depreciation and amortization of real estate assets and gains or losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), they facilitate comparisons of operating performance between periods and between other REITs in our peer group. Accounting for real estate assets in accordance with generally accepted accounting principles ("GAAP") implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.

Additionally, ARCP believes that AFFO, by excluding acquisition-related fees and expenses, amortization of above-market lease assets and liabilities, amortization of deferred financing costs, straight-line rent, non-cash mark-to-market adjustments, amortization of restricted stock, non-cash compensation and gains and losses, provides information consistent with management's analysis of the operating performance of the properties. By providing AFFO, ARCP believes it is presenting useful information that assists investors and analysts to better assess the sustainability of our operating performance. Further, ARCP believes AFFO is useful in comparing the sustainability of our operating performance with the sustainability of the operating performance of other real estate companies, including exchange-traded and non-traded REITs.

As a result, ARCP believes that the use of FFO and AFFO, together with the required GAAP presentations, provide a more complete understanding of our performance relative to our peers and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities.

Forward-Looking Statements

Information set forth herein (including information included or incorporated by reference herein) contains "forward-looking statements" (as defined in Section 21E of the Securities Exchange Act of 1934, as amended), which reflect ARCP's expectations regarding future events. The forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those contained in the forward-looking statements. Such forward-looking statements include, but are not limited to, the new combined company's plans, market and other expectations, objectives, intentions, as well as any expectations or projections with respect to the combined company, including regarding future dividends and market valuations, and estimates of growth, including funds from operations and adjusted funds from operations, and other statements that are not historical facts.

The following additional factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: market volatility, unexpected costs or unexpected liabilities that may arise from the transaction; the inability to retain key personnel; continuation or deterioration of current market conditions; whether or not ARCP common stock will be included in REIT and public exchange indices; uncertainty regarding the level of demand for ARCP common stock that inclusion in such indices would generate; future regulatory or legislative actions that could adversely affect ARCP; and the business plans of the tenants of ARCP. Additional factors that may affect future results are contained in ARCP's filings with the SEC, which are available at the SEC's website at www.sec.gov. ARCP disclaims any obligation to update and revise statements contained in these materials based on new information or otherwise.

SOURCE American Realty Capital Properties, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
“DevOps is really about the business. The business is under pressure today, competitively in the marketplace to respond to the expectations of the customer. The business is driving IT and the problem is that IT isn't responding fast enough," explained Mark Levy, Senior Product Marketing Manager at Serena Software, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
“We help people build clusters, in the classical sense of the cluster. We help people put a full stack on top of every single one of those machines. We do the full bare metal install," explained Greg Bruno, Vice President of Engineering and co-founder of StackIQ, in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The cloud is becoming the de-facto way for enterprises to leverage common infrastructure while innovating and one of the biggest obstacles facing public cloud computing is security. In his session at 15th Cloud Expo, Jeff Aliber, a global marketing executive at Verizon, discussed how the best place for web security is in the cloud. Benefits include: Functions as the first layer of defense Easy operation –CNAME change Implement an integrated solution Best architecture for addressing network-l...
Mobile commerce traffic is surpassing desktop, yet less than 20% of sales in the U.S. are mobile commerce sales. In his session at 15th Cloud Expo, Dan Franklin, Segment Manager, Commerce, at Verizon Digital Media Services, defined mobile devices and discussed how next generation means simplification. It means taking your digital content and turning it into instantly gratifying experiences.
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, p...
Leysin American School is an exclusive, private boarding school located in Leysin, Switzerland. Leysin selected an OpenStack-powered, private cloud as a service to manage multiple applications and provide development environments for students across the institution. Seeking to meet rigid data sovereignty and data integrity requirements while offering flexible, on-demand cloud resources to users, Leysin identified OpenStack as the clear choice to round out the school's cloud strategy. Additional...
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's

"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Media announced today that Aruna Ravichandran, VP of Marketing, Application Performance Management and DevOps at CA Technologies, has joined DevOps Journal’s authors. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Aruna's inaugural article "Four Essential Cultural Hacks for DevOps Newbies" discusses how to demonstrate the...