San Diego Business Journal

Shareholders Approve $3 Billion Acquisition By Realty Income

Thursday, January 17, 2013

Shareholders of both companies have approved the acquisition of American Realty Capital Trust by Escondido-based Realty Income. Realty Income officials said the transaction, valued at approximately $3 billion, is expected to close by month’s end.

After completing the acquisition of New York-based ARCT, Realty Income is expected to have a total enterprise value of approximately $12.4 billion and an equity market capitalization of $8.4 billion, officials said in the statement. It will be among the nation’s largest real estate investment trusts, and the largest publicly traded REIT based on net-lease holdings.

With the close, Realty Income will issue 45.6 million shares of common stock to ARCT shareholders, based on a fixed exchange ratio of 0.2874 shares of Realty Income stock for each ARCT common stock share owned. ARCT shareholders also will receive a one-time cash payment of 35 cents per share.

Realty Income will add 515 freestanding commercial properties currently owned by ARCT to its portfolio, bringing its total to 3,528 properties leased to 202 tenants in 48 industries.

“As a result of this transaction, we will significantly advance our strategic objective to increase the overall credit quality of the revenue generated by our tenants,” Realty Income CEO Tom A. Lewis said in the statement.

— SDBJ Staff Report