Realty Income to acquire Vereit, then spin off office properties in new REIT

• Realty Income (NYSE:O) agrees to acquire Vereit (NYSE:VER) in an all stock transaction then plans to spin off their office properties into a new REIT — moves that it says will increase its size, scale, and diversification.
• The merged company will have an enterprise value of about $50B.
• The transactions are expected to strengthen Realty Income's cash flow durability and provide "significant financial synergies," particularly through accretive debt refinancing opportunities.
• Vereit shareholders will get 0.705 shares of Realty Income stock for each VER share they own. Based on Wednesday's close, the transaction values VER at ~$48.29 per share, or about a 17% premium to VER's closing price of $41.26.
• VER rises 18% in premarket trading to $48.49. Realty Income shares rise 1.6%.
• Immediately after that transaction closes, the companies expect to spin off substantially all of the office properties of both companies into a new. self-managed, publicly traded REIT.
• The transactions are expected to add more than 10% to Realty Income's adjusted FFO per share in the first year.
• Realty Income's growth strategy will stay focused primarily on high-quality, single-tenant net lease retail and industrial properties in the U.S. and U.K., leased to clients that are leaders in their respective businesses.
• The merger is expected to close during Q4 2021.
• Conference call at 8:00 AM ET.