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AR Global Non-Traded REITs to Merge in $1.4B Deal

September 16, 2016

AR Global Non-Traded REITs to Merge in $1.4B Deal

Once combined, the retail-focused portfolio will comprise 494 properties in 39 states with a total of 20.8 million square feet.

September 9, 2016 | by Gail Kalinoski | Commercial Property Executive

New York—Two non-traded REITs sponsored by New York-based AR Global plan to merge, with American Finance Trust Inc. acquiring the much smaller American Realty Capital–Realty Centers of America Inc.–for $1.4 billion in a combination of cash, stock and assumed debt. The merger will create a retail-focused REIT with an enterprise value of approximately $3.9 billion.

In separate announcements, both REITs said special committees of their boards had unanimously approved the definitive merger agreement. Once combined, the portfolio will comprise 494 properties in 39 states with a total of 20.8 million square feet.

Under the terms of the agreement, RCA shareholders will receive 0.385 shares of AFIN common stock and $0.95 in cash for each share of RCA common stock they own. Upon closing, RCA shareholders will own about 37 percent of the combined company. The deal also gives RCA a 45-day go-shop period in which they can seek proposals from third parties. RCA would pay a $5.1 million termination fee to AFIN if RCA cancels the merger agreement.

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