W.P. Carey to acquire CPA:18 in $2.7B stock-and-cash transaction

Feb. 28, 2022 8:14 AM ETW. P. Carey Inc. (WPC)By: Liz Kiesche, SA News Editor31 Comments

Documents about mergers and acquisitions m&a with a pen.

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Net lease REIT W.P. Carey (NYSE:WPC) has agreed to acquire Corporate Property Associates 18 (CPA:18) in a transaction valued at $2.7B including the assumption of debt.

WPC said the deal "essentially concludes the company's exit from investment management, providing greater earnings durability with substantially all pro forma AFFO derived from stable and long-term real estate revenues."

The REIT expects the acquisition to immediately add to its Real Estate adjusted FFO per share, helping to offset the loss of over half of the earnings contribution from income earned for managing CPA:18.

Other benefits that W.P. Carey (WPC) expects include: The addition of a well-diversified net lease portfolio will enhance some portfolio metrics, the addition of operating self-storage assets with strong growth potential; it will enhance operating efficiency by spreading G&A expenses over a larger asset base.

CPA:18 stockholders will get 0.0978 of a share of W.P. Carey (WPC) common stock and $3.00 of cash for each share of CPA:18 held, representing an initial implied value of $10.45 per share.

W.P. Carey (WPC) expects to fund the cash portion of the acquisition with existing liquidity and net proceeds from the sale of certain CPA:18 assets contemplated to occur before the closing of the transaction. W.P. Carey will own ~93% and CPA:18 stockholders will own ~7% of the combined company.

Conference call at 8:30 AM ET.

In 2018, W. P. Carey acquired CPA:17 in a stock exchange valued at ~$6B at the time.

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