ARCP Closes $900M Stock Placement

NEW YORK CITY-American Realty Capital Properties Inc. said Monday it had closed on a pair of private stock placements with combined gross proceeds of $900 million. The placements, which were completed on Friday, will fund the common equity components of ARCP's $2.2-billion deal for net lease rival CapLease and the acquisition of an $807-million portfolio from GE Capital. The separate $1.45-billion deal with GE Capital that American Realty Capital Trust IV announced last week was not part of the ARCP stock placement.

In a release, ARCP chairman and CEO Nicholas Schorsch says that with the placements under the company's belt, “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.”

ARCP sold about 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, the company says. Originally intended to total $800 million, the placements were oversubscribed and upsized to $900 million, and were led by existing institutional stockholders in ARCP.

RCS Capital, the investment banking and capital markets division of Realty Capital Securities LLC and RCS Capital Corp., and JMP Securities LLC served as co-placement agents. The placements were originally announced on June 4.