ARCP buying ARCT IV in $3.1B cash-and-stock dealAP , Associated Press
Jul. 2, 2013 7:06 AM ET
NEW YORK (AP) — American Realty Capital Properties Inc. is buying American Realty Capital Trust IV Inc. in a cash-and-stock deal valued at about $3.1 billion.
Shares of ARCP nearly doubled in premarket trading on Tuesday.
ARCP, a real estate investment trust, said that the deal — along with other recent transactions — will make it the second-biggest net lease REIT. After the transaction closes, ARCP will own 2,579 single tenant properties in 48 states and Puerto Rico.
Last month ARCT IV announced that it would pay $1.45 billion to GE Capital for properties leased mostly to restaurant chains like KFC, Burger King and Wendy's. The deal includes 986 net lease properties in 47 states.
In a separate deal, also in June, ARCP said that it would pay $807 million for 471 properties from GE Capital, which are mostly leased to operators of restaurants such as IHOP, Burger King and Wendy's.
In May, ARCP announced that it was buying fellow real estate investment trust CapLease in a deal the companies valued at about $2.2 billion.
In the ARCT IV transaction, each outstanding share of ARCT IV will be converted to the right to receive 2.05 shares of ARCP stock or $30 per share in cash.
Both companies' boards approved the deal, but it still needs approval from the companies' shareholders.
New York-based ARCP said that due in part to the acquisition, it is raising its 2014 adjusted funds from operations forecast to $1.19 to $1.25 per share. Its prior guidance was for 93 cents per share.
Funds from operations, or FFO, is a key measure of profitability for REITs that adds back items like amortization and depreciation to net income.
The buyout is expected to close by the third quarter's end.
ARCP's stock rose $13.53, or 91.4 percent, to $28.33 before the market open.