BREAKING NEWS: ARCP to Buy Cole for $11.2B, Creating Largest Net-Lease REIT

Expected to close during the first half of 2014, the deal would create a $21.5 billion company.
Nicholas Schorsch, ARCP's chairman & CEO
Nicholas Schorsch, ARCP’s chairman & CEO

In one of the real estate industry’s most potentially far-reaching deals of recent years, American Realty Capital Properties Inc. will acquire Cole Real Estate Investments for $11.2 billion, the companies announced this morning. The deal will create the world’s biggest net-lease REIT, with an estimated enterprise value totaling $21.5 billion.  Closing is expected during the first half of 2014.

“My decision and the decision of our board to merge the companies under Nick’s leadership is entirely forward-thinking, namely, our two companies are far better and more powerful together than apart; our union provides immediate and obvious benefits of size, scale and diversification,” said Christopher Cole, founder & executive chairman of Phoenix-based Cole Real Estate Investments, in a statement. Both Cole and Mark Nemer, the company’s president, said they would leave the firm as the result of the acquisition.

Combining New York City-based ARCP and Cole, headquartered in Phoenix, will total more than 3,700 properties encompassing 100 million square feet in 49 states and Puerto Rico. The offer represents a 13.8 percent premium over the closing price of Cole’s stock on Tuesday.

“Both companies share the same vision, namely to drive value for stockholders by placing their interests ahead of our own, aligning pay with performance, and reporting fully and transparently,” commented Nicholas Schorsch, chairman & CEO of ARCP. “We share the same disciplined investment philosophy and investment processes, which are focused on investment grade tenancy, long lease durations, a strong diversified tenant base, and a mix of property type and geography.”

Watch for detailed coverage of this developing story.