American Realty Capital Properties to Sell Cole Capital

October 23, 2014

On October 1, 2014, American Realty Capital Properties announced that it had signed an agreement for the sale of Cole Capital to RCS Capital Corp. for at least $700 million. 

On October 1, 2014, American Realty Capital Properties, Inc. (“ARCP”) announced that it had signed an agreement for the sale of Cole Capital, ARCP’s private capital management business, to RCS Capital Corp. (“RCAP”) for at least $700 million.  As part of the transaction, ARCP will act as sub-advisor to Cole Capital’s non-traded real estate investment trusts (the “Managed Funds”) and acquire and property manage net lease real estate assets for the Managed Funds.  ARCP also agreed to source, underwrite and acquire U.S. net lease properties for American Realty Capital Global Trust II, Inc. 

As consideration for the transaction, ARCP will receive $200 million in cash, 8,397,857 shares of RCAP’s Class A common stock, par value $0.001 per share, or $200 million in cash at the election of RCAP, and $300 million of unsecured debt with a laddered interest rate increasing from 7.5% to 10.5% at certain time intervals until maturity in December 2021.  Both the common stock and the unsecured notes will not be subject to any lock-up. ARCP will also be entitled to an earn-out of up to an additional $130 million based upon Cole Capital’s 2015 EBITDA.  The transaction was structured to potentially eliminate taxes for ARCP. 

To read the press release, please click here.


Categories

Investment Manager M&A, Transactions