{"id":1004104827,"date":"2014-10-02T06:09:37","date_gmt":"2014-10-02T14:09:37","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004104827"},"modified":"2022-12-09T02:29:45","modified_gmt":"2022-12-09T10:29:45","slug":"rcs-to-acquire-cole-capital-for-700m","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/rcs-to-acquire-cole-capital-for-700m\/","title":{"rendered":"RCS to Acquire Cole Capital for $700M"},"content":{"rendered":"

\u00a0<\/i>By Gail Kalinoski, Contributing Editor<\/i><\/p>\n

\"Michael<\/a>

Michael Weil, RCAP<\/p><\/div>\n

American Realty Capital Properties Inc. is selling Cole Capital, its private capital management business, to sister company RCS Capital Corp. for at least $700 million in a deal described as \u201cstrategically and financially important to RCAP.\u201d<\/p>\n

The deal is expected to close in two steps with RCAP paying a portion of the base purchase price at the second closing and the balance in April. The terms call for RCAP to pay ARCP $200 million in cash, $200 million in RCAP common stock and assume $300 million in debt. The common stock portion could also be paid in cash. In addition to the base price, ARCP could earn up to an additional $130 million by early 2016 depending on Cole Capital\u2019s actual 2015 EBITDA.<\/p>\n

The sale of Cole Capital, which was acquired as part of the $11.2 billion merger between ARCP and its former rival Cole Real Estate Investments Inc.<\/a>, announced a year ago, lets ARCP focus on growing its single-tenant net-lease business, which is already the largest in the world.<\/p>\n

But it also gives ARCP an active and profitable role in Cole Capital because it will be the exclusive sub-advisor on certain non-traded REITs currently advised by Cole Capital. Already the leader in the net lease REIT industry, the sub-advisor role gives ARCP a steady stream of fee income and combines two of the most recognized names in non-traded REITs, according to an investors\u2019 presentation. ARCP has also agreed to source, underwrite and acquire net lease properties in the United States for American Realty Capital Global Trust II, Inc. (ARC Global II).<\/p>\n

\u201cThis transaction significantly simplifies our business model, provides us a long-term economic stake in the growth and success of Cole Capital\u2019s investment programs and should enhance and accelerate the capitalization of these programs, thus improving the visibility of our fee stream while eliminating considerable overhead and volatility,\u201d David Kay, ARCP\u2019s new CEO, said in a statement.<\/p>\n

Kay, the former president of the New York-based REIT, took over Wednesday as CEO of ARCP from Nicholas Schorsch, who remains chairman of the board of ARCP and executive chairman of RCAP\u2019s board. Lisa Beeson has become president and will also retain her COO title and duties. Both moves were previously announced.<\/p>\n

Michael Weil, RCAP\u2019s CEO, described the acquisition of Cole Capital as a \u201cwin for both companies,\u201d during a Wednesday morning conference call with analysts.<\/p>\n

Weil said the firm now has three investing classes, asset management, retail advice and wholesale distribution, which \u201ccomplement each other quite nicely.\u201d<\/p>\n

\u201cWe believe the\u00a0 combination of the two companies will achieve several significant strategic objectives in a single transaction, including growing our outstanding wholesale team\u2019s management and field ranks and materially expanding our investment management business segment by nearly 400 percent,\u201d Weil said in a news release. \u201cMoreover, it diversified RCAP\u2019s revenues substantially, increases our recurring revenue base, and adds a full complement of net lease real estate offerings to our product suite.\u201d<\/p>\n

Bill Dwyer, CEO of Realty Capital Securities L.L.C., the wholly owned wholesale broker-dealer for RCAP, said the addition of seven investment products \u201crepresents significant equity capital raising potential.\u201d<\/p>\n

The seven investment programs are: Cole Corporate Income Trust (CCIT), Cole Credit Property Trust IV (CCPT IV), Cole Office & Industrial REIT (CCIT II), Cole Credit Property Trust V (CCPT V) Cole Real Estate Income Strategy (Daily NAV) and two future programs, Cole Credit Property Trust VI (CCPT VI) and Cole Office & Industrial REIT (CCIT II).<\/p>\n

Those programs represent nearly $19 billion in registered equity offerings and more than $30 billion in estimated buying power, according to the release.<\/p>\n

Barclays Capital Inc., RCS Capital, the investment banking and capital markets division of Realty Capital Securities, L.L.C., and Citi are acting as financial advisors and Duane Morris L.L.P. is acting as legal counsel to RCAP. Moelis & Co. is acting as financial advisor and Weil, Gotshal & Manges L.L.P. is board counsel to ARCP. Proskauer Rose L.L.P is acting corporate counsel to ARCP and RCAP.<\/p>\n","protected":false},"excerpt":{"rendered":"

American Realty Capital Properties is selling Cole Capital to sister company RCS Capital Corp. for at least $700 million in a deal described as \u201cstrategically and financially important to RCAP.\u201d<\/p>\n","protected":false},"author":1068,"featured_media":1004104835,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21783,21742],"tags":[],"class_list":["post-1004104827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-investment","category-latest"],"acf":[],"yoast_head":"\nRCS to Acquire Cole Capital for $700M - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/rcs-to-acquire-cole-capital-for-700m\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RCS to Acquire Cole Capital for $700M\" \/>\n<meta property=\"og:description\" content=\"American Realty Capital Properties is selling Cole Capital to sister company RCS Capital Corp. for at least $700 million in a deal described as \u201cstrategically and financially important to RCAP.\u201d\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/rcs-to-acquire-cole-capital-for-700m\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2014-10-02T14:09:37+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T10:29:45+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2014\/10\/MichaelWeil.png\" \/>\n\t<meta property=\"og:image:width\" content=\"358\" \/>\n\t<meta property=\"og:image:height\" content=\"336\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Gail Kalinoski\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/rcs-to-acquire-cole-capital-for-700m\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/rcs-to-acquire-cole-capital-for-700m\\\/\"},\"author\":{\"name\":\"Gail Kalinoski\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/fc5b5df1393e5023d2417bd48c2fda57\"},\"headline\":\"RCS to Acquire Cole Capital for $700M\",\"datePublished\":\"2014-10-02T14:09:37+00:00\",\"dateModified\":\"2022-12-09T10:29:45+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/rcs-to-acquire-cole-capital-for-700m\\\/\"},\"wordCount\":689,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/rcs-to-acquire-cole-capital-for-700m\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2014\\\/10\\\/MichaelWeil.png\",\"articleSection\":[\"Featured\",\"Investment\",\"News\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/rcs-to-acquire-cole-capital-for-700m\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/rcs-to-acquire-cole-capital-for-700m\\\/\",\"name\":\"RCS to Acquire Cole Capital for $700M - 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Gail has been a freelance writer and editor for more than 20 years, contributing to daily websites, magazines, weekly business newspapers, market intelligence newsletters, research reports, monthly B-to-B and consumer magazines. Earlier in her career, Gail worked for Gannett Corp. as an editor and reporter for 15 years. 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