{"id":1004688124,"date":"2023-10-31T04:35:23","date_gmt":"2023-10-31T12:35:23","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004688124"},"modified":"2023-10-31T05:50:21","modified_gmt":"2023-10-31T13:50:21","slug":"spirit-realty-capital-trades-for-9-3b","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/spirit-realty-capital-trades-for-9-3b\/","title":{"rendered":"Realty Income to Acquire Spirit Capital in $9.3B Deal"},"content":{"rendered":"
\"Jackson<\/a>

Jackson Hsieh, President & CEO, Spirit Realty Capital. Image courtesy of RealShare Net Lease<\/em><\/p><\/div>\n

Realty Income Corp<\/strong>. and Spirit Realty Capital<\/strong> Inc. have entered into a definitive merger agreement under which Realty Income will acquire Spirit in an all-stock transaction valued at an enterprise value of about $9.3 billion.<\/p>\n

The transaction is reported to be leverage neutral and will not require any new external capital to finance. Once completed, the merger will result in an enterprise value of about $63 billion for the merged company, according to Realty Income.<\/p>\n

Under the terms of the agreement, Spirit shareholders will receive 0.762 newly issued Realty Income common shares for each Spirit common share. This will result in Realty Income and Spirit shareholders owning approximately 87 percent and 13 percent, respectively, of the combined company.<\/p>\n

Subject to customary closing conditions, including approval by Spirit shareholders, the merger is expected to close during the first quarter of 2024. No approval of Realty Income shareholders will be required.<\/p>\n

\n

READ ALSO<\/strong>: Net Lease Cap Rates Rise for 5th Straight Quarter<\/a><\/p>\n

\n

In a prepared statement, Sumit Roy, president & CEO of Realty Income, noted that Spirit\u2019s assets are highly complementary to Realty Income\u2019s existing portfolio, extending the company\u2019s investments in industries that have proven to generate durable cash flows over several economic cycles.<\/p>\n

Spirit President & CEO Jackson Hsieh added that the merger offers Spirit\u2019s shareholders immediate value by providing a more competitive cost of capital, an A-rated balance sheet, broader tenant diversification, and the ability to leverage economies of scale.<\/p>\n

Wells Fargo<\/strong> is the financial advisor to Realty Income, and Latham & Watkins<\/strong> is the legal advisor.<\/p>\n

J.P. Morgan Securities<\/strong> LLC and Morgan Stanley & Co<\/strong>. LLC are Spirit\u2019s financial advisors, and Wachtell, Lipton, Rosen & Katz<\/strong> is the legal advisor.<\/p>\n

The whys of the deal<\/h2>\n

The merger announcement<\/a> listed several rationales for the transaction, among which are:<\/p>\n