NEW YORK, June 10, 2013 /PRNewswire/ -- American Realty
Capital Properties, Inc. ("ARCP" or the "Company") (NASDAQ: ARCP)
announced today the successful completion on June 7, 2013, of two previously announced private
placement transactions, pursuant to which ARCP sold approximately
29.4 million shares of its common stock at a price of $15.47 per share for gross proceeds of
$455 million, and approximately 28.4
million shares of 5.81% Series C convertible preferred stock with
an aggregate liquidation preference of $445
million (collectively, the "Placements"). Net proceeds from
the Placements of approximately $896
million fully fund ARCP's working capital needs and the
common equity component of recently announced strategic
acquisitions, including an $807 million property portfolio
being acquired from GE Capital and the $2.2
billion acquisition of CapLease, Inc. ("CapLease") (NYSE:
LSE).
The Placements, originally intended to be $800 million, were oversubscribed and upsized to
$900 million, and were led by
existing institutional stockholders in ARCP.
"This outstanding execution has allowed the Company to raise
equity to fund fully two important strategic and accretive
transactions, namely CapLease and the GE Capital portfolio," noted
Nicholas S. Schorsch, Chairman and
CEO of ARCP. "With the Placements, we have satisfied our
target equity raise for these and our additional pipeline
acquisitions,resulting in a leverage neutral impact of these
acquisitions on our balance sheet on a weighted average basis, and
eliminated any uncertainty regarding the sources of funding for
these announced and additional pipeline purchases. This recent
capitalization activity further positions the Company to continue
to focus on our four-pronged growth strategy: contractual rental
growth, diversification of our credit quality, organic and granular
acquisitions, and strategic corporate and portfolio combinations
through M&A activities."
Added Brian S. Block, Chief
Financial Officer of ARCP, "Due to the strong institutional support
for our Company and demand for our equity, we have been able to
place this equity at an exceedingly low cost when compared to
market norms. The demand for this equity placement,
especially given its size, demonstrates the attractiveness of
ARCP's property portfolio and management team, the positive market
response to our growth strategy, built upon an active and accretive
acquisition program, and the strength of our balance sheet and
capital structure."
RCS Capital, the investment banking and capital markets division
of Realty Capital Securities, LLC and RCS Capital Corporation
(NYSE: RCAP), and JMP Securities LLC served as co-placement agents
in connection with the Placements.
Previously announced earnings estimates can be found in Annex A
attached hereto.
Important Notice
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy securities. The securities sold in
these private placements have not been registered under the
Securities Act of 1933 and may not be offered or sold in
the United States in the absence
of an effective registration statement or exemption from
registration requirements.
ARCP is a publicly traded Maryland corporation listed on The NASDAQ
Global Select Market that qualified as a real estate investment
trust for U.S. federal income tax purposes for the taxable year
ended December 31, 2011, focused on
acquiring and owning single tenant freestanding commercial
properties subject to net leases with high credit quality tenants.
Additional information about ARCP can be found on its website at
www.arcpreit.com. The Company may disseminate important information
regarding the company and its operations, including financial
information, through social media platforms such as Twitter,
Facebook and LinkedIn.
Basis of Pro Forma Data and Funds from Operations and
Adjusted Funds from Operations
The rental revenue changes and statistics described above are
based on the companies' results for the three months ended
March 31, 2013, and assume the
acquisition occurred at the beginning of the period. Other data,
such as occupancy and lease rollover figures, are based on data as
of March 31, 2013.
ARCP considers FFO and AFFO, which is FFO as adjusted to exclude
acquisition-related fees and expenses, amortization of above-market
lease assets and liabilities, amortization of deferred financing
costs, straight-line rent, non-cash mark-to-market adjustments,
amortization of restricted stock, non-cash compensation and
non-recurring gains and losses useful indicators of the performance
of a REIT. Because FFO calculations exclude such factors as
depreciation and amortization of real estate assets and gains or
losses from sales of operating real estate assets (which can vary
among owners of identical assets in similar conditions based on
historical cost accounting and useful-life estimates), they
facilitate comparisons of operating performance between periods and
between other REITs in ARCP's peer groups. Accounting for real
estate assets in accordance with GAAP implicitly assumes that the
value of real estate assets diminishes predictably over time. Since
real estate values have historically risen or fallen with market
conditions, many industry investors and analysts have considered
the presentation of operating results for real estate companies
that use historical cost accounting to be insufficient by
themselves.
Additionally, ARCP believes that AFFO, by excluding
acquisition-related fees and expenses, amortization of above-market
lease assets and liabilities, amortization of deferred financing
costs, straight-line rent, non-cash mark-to-market adjustments,
amortization of restricted stock, non-cash compensation and
non-recurring gains and losses, provides information consistent
with management's analysis of the operating performance of the
properties. By providing AFFO, ARCP believes they are presenting
useful information that assists investors and analysts to better
assess the sustainability of their operating performance. Further,
ARCP believes AFFO is useful in comparing the sustainability of
their operating performance with the sustainability of the
operating performance of other real estate companies, including
exchange-traded and non-traded REITs.
As a result, ARCP believes that the use of FFO and AFFO,
together with the required GAAP presentations, provide a more
complete understanding of our performance relative to our peers and
a more informed and appropriate basis on which to make decisions
involving operating, financing, and investing activities.
FFO and AFFO are not in accordance with, or a substitute for,
measures prepared in accordance with GAAP, and may be different
from non-GAAP measures used by other companies. In addition, FFO
and AFFO are not based on any comprehensive set of accounting rules
or principles. Non-GAAP measures, such as FFO and AFFO, have
limitations in that they do not reflect all of the amounts
associated with ARCP's results of operations that would be
reflected in measures determined in accordance with GAAP. These
measures should only be used to evaluate ARCP's performance in
conjunction with corresponding GAAP measures.
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed transaction,
CapLease expects to prepare and file with the Securities and
Exchange Commission ("SEC") a proxy statement and other documents
regarding the proposed transaction. The proxy statement will
contain important information about the proposed transaction and
related matters. STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT
(INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER
RELEVANT DOCUMENTS FILED BY ARCP OR CAPLEASE WITH THE SEC CAREFULLY
IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT ARCP, CAPLEASE AND THE PROPOSED
TRANSACTION.
Investors and security holders of CapLease will be able to
obtain free copies of the proxy statement and other relevant
documents filed by CapLease with the SEC (if and when then become
available) through the website maintained by the SEC at
www.sec.gov. Copies of the documents filed by CapLease with the SEC
are also available on CapLease's website at www.caplease.com, and
copies of the documents filed by ARCP with the SEC are available on
ARCP's website at www.arcpreit.com.
Participants in Solicitation
The directors, executive officers and employees of CapLease may
be deemed "participants" in the solicitation of proxies from
stockholders of CapLease in favor of the proposed merger.
Information regarding the persons who may, under the rules of the
SEC, be considered participants in the solicitation of the
stockholders of CapLease in connection with the proposed merger
will be set forth in the proxy statement and the other relevant
documents to be filed with the SEC. You can find information about
CapLease's executive officers and directors in its Annual Report on
Form 10-K for the fiscal year ended December
31, 2012, and in its definitive proxy statement filed with
the SEC on Schedule 14A on April 19,
2013.
Forward-Looking Statements
Information set forth herein (including information included or
incorporated by reference herein) contains "forward-looking
statements" (as defined in Section 21E of the Securities Exchange
Act of 1934, as amended), which reflect ARCP's and CapLease's
expectations regarding future events. The forward-looking
statements involve a number of risks, uncertainties and other
factors that could cause actual results to differ materially from
those contained in the forward-looking statements. Such
forward-looking statements include, but are not limited to whether
and when the transactions contemplated by the merger agreement will
be consummated, the new combined company's plans, market and other
expectations, objectives, intentions, as well as any expectations
or projections with respect to the combined company, including
regarding future dividends and market valuations, and estimates of
growth, including FFO and AFFO, and other statements that are not
historical facts.
The following additional factors, among others, could cause
actual results to differ from those set forth in the
forward-looking statements: (1) the occurrence of any event, change
or other circumstances that could give rise to the termination of
the merger agreement with CapLease; (2) the inability to complete
the proposed merger due to the failure to obtain CapLease
stockholder approval for the merger or the failure to satisfy other
conditions to completion of the merger, including that a
governmental entity may prohibit, delay or refuse to grant approval
for the consummation of the merger; (3) risks related to disruption
of management's attention from the ongoing business operations due
to announced transactions with CapLease and GE Capital; (4) the
effect of the announcement of the proposed merger on CapLease's or
ARCP's relationships with its customers, tenants, lenders,
operating results and business generally; (5) the outcome of any
legal proceedings relating to the merger or the merger agreement;
(6) risks to consummation of the merger, including the risk that
the merger will not be consummated within the expected time period
or at all; (7) the occurrence of any event, change or other
circumstances that could give rise to the termination of the
purchase agreement with GE Capital; and (8) risks to consummation
of the GE Capital portfolio acquisition, including the risk that
the portfolio will not be acquired within the expected time period
or at all. Additional factors that may affect future results
are contained in ARCP's and CapLease's(solely with respect to the
CapLease transaction) filings with the SEC, which are available at
the SEC's website at www.sec.gov. ARCP and CapLease (solely with
respect to the CapLease transaction)disclaim any obligation to
update and revise statements contained in these materials based on
new information or otherwise.
Annex A
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SOURCE American Realty Capital Properties, Inc.