SIR, Cole Corporate Finalize Merger

NEWTON, MA—Select Income REIT and Cole Corporate Income Trust have wrapped up their $3-billion merger, first announced this past September. The deal adds 64 single-tenant net lease properties to SIR's portfolio, and brings the REIT's holdings to 43 million square feet across 35 states.

The merger transaction was structured as a cash or share election, under which CCIT stockholders were able to elect to receive either $10.50 in cash per share of CCIT common stock for up to 60% of CCIT's outstanding common stock, or 0.36 SIR common shares per share of CCIT common stock for up to 60% of CCIT's outstanding common stock. CCIT shareholders largely opted for cash.

“We believe the acquisition of CCIT firmly positions Select Income REIT as the premier single-tenant net lease office and industrial REIT,” says David Blackman, Newton, MA-based SIR's president and COO. “This acquisition significantly diversifies the company and enhances all of our key portfolio metrics.”

At American Realty Capital Properties, whose Cole Capital managed the Phoenix-based CCIT, interim chairman and CEO William Stanley says the completion of the merger provides liquidity for CCIT's shareholders “while creating a market-leading office and industrial REIT.” He adds that SIR's shareholders will now have “the opportunity to benefit from an increased enterprise value, attractive embedded growth potential and enhanced portfolio metrics. Additionally, this transaction reaffirms the value Cole Capital contributes to ARCP."

SIR on Thursday reiterated its intention to increase its common share dividend to $2 per share annually from $1.92 per share, now that the CCIT acquisition is complete. Based on the increased distribution rate, each CCIT stockholder who received SIR shares as consideration will receive $0.72 annually on each 0.36 of an SIR share, a 10.8% increase from CCIT's annualized distribution of $0.65 per share.