Global law firm Proskauer is representing American Realty Capital Properties in a $9.7 billion offer for Cole Credit Property Trust III in a deal that would create the country’s largest publicly traded net-lease real estate investment trust (REIT).
The offer, which comprises $6.7 billion in cash and stock and debt assumed by American Realty, revises an earlier bid made by the company on March 19 valued at $9 billion. The new proposal incorporates the acquisition of Cole Holdings Corporation, a manager of more than 2,000 U.S. commercial buildings that agreed to be acquired by Cole Credit on March 6, and reflects a higher valuation of properties held by Cole Credit.
American Realty comprises almost 700 freestanding commercial properties totaling approximately 16.4 million square feet in 44 states and Puerto Rico. Its top 10 tenants include Dollar General, Citizens Bank and FedEx.
Cole Credit Property Trust III owns more than 900 properties with a combined area of 40 million square feet in 47 states and counts CVS Caremark, Home Depot and Wal-Mart Stores among its tenants.
The merger of the two companies would create a real estate giant with 1,706 properties and more than 400 tenants – doubling American Realty’s current amount of properties, increasing square footage fourfold and quadrupling the company’s enterprise value.
The deal is the second major transaction acted on by Proskauer’s Real Estate Capital Markets Group for American Realty in the past three months. In December 2012, the firm served as corporate counsel to American Realty and American Realty Capital Trust III, Inc., in connection with their merger. The deal, which created a combined real estate investment company with an enterprise value of $3 billion, closed in February 2013.
That deal followed on the heels of another significant transaction in September in which the Real Estate Markets Group advised American Realty Capital Trust on its acquisition by Realty Income Corporation in a cash-and-stock deal valued in excess of $2.95 billion. One of the largest announced mergers of U.S. REITs in 2012, the deal closed in January 2013.
Together, the two deals vaulted Proskauer to first place among law firms in SNL Financial’s 2012 REIT M&A league tables. The firm claimed the top spot in terms of both number of deals and deal value.
The Proskauer deal team advising on American Realty’s bid is led by Peter M. Fass, Proskauer Partner and co-head of the Real Estate Capital Markets Group, and includes Corporate Partners Daniel I. Ganitsky and Andrew Bettwy; Senior Counsel Glen Lim and Associates Michael E. Ellis, Andrea M. Hwang and Leon Volchyok.
