The proposed merger between W. P. Carey Inc. (NYSE: WPC), a net lease real estate investment trust, with one of its managed non-traded REITs, Corporate Property Associates 17 – Global Incorporated, was approved by stockholders of both companies. The transaction is expected to close at 12:01 a.m. on October 31, 2018.
CPA:17 will merge with W. P. Carey in a stock-for-stock transaction valued at approximately $6 billion. CPA:17 stockholders will receive a fixed exchange ratio of 0.160 shares of W. P. Carey common stock for each share of CPA:17, equivalent to $10.62 per share based on W. P. Carey’s closing share price of $66.43 on October 29, 2018.
Shares of CPA: 17 common stock originally sold for $10.00 each and have an annual distribution rate of 6.5 percent. W. P. Carey expects to issue approximately 53.9 million shares common stock in connection with the merger.
Post-closing, W. P. Carey is expected to have a pro forma equity market capitalization of approximately $11 billion and an enterprise value of approximately $17 billion. CPA: 17 stockholders will own approximately 33 percent of the combined company, and W.P. Carey expects to maintain its current quarterly dividend of $1.02 per share.
W. P. Carey, one of the largest net lease REITs, has an enterprise value of $11 billion and a portfolio of commercial real estate totaling 878 properties. The company invests in single-tenant industrial, warehouse, office and retail properties with long-term leases with built-in rent escalators. Its portfolio is located primarily in North America and Northern and Western Europe.
In June 2017, the W.P. Carey board approved a plan to exit all non-traded retail fundraising activities to focus exclusively on net lease investing for the company’s balance sheet. W.P. Carey’s managed programs include non-traded REITs, non-traded business development companies, and private funds.
CPA:17’s offering was declared effective by the SEC in November 2007 and closed in January 2013 after raising nearly $3 billion in investor equity. As of the second quarter of 2018, the company’s $4.8 billion portfolio consists of 449 properties, according to Summit Investment Research.