(By Balachander) Realty Income Corp. (NYSE:O), an equity real estate investment trust (REIT), has agreed to acquire American Realty Capital Trust Inc. (NASDAQ:ARCT) for roughly $2.95 billion. ARCT shares rose 5.10 percent in premarket trading on Thursday.
Escondido, California-based Realty Income, which is engaged in the acquisition of commercial retail real estate properties, expects the deal to immediately add to Funds from Operations (FFO) and generate about 20 cents to 22 cents per share in additional FFO annually.
The REIT said the deal will increase the total number of properties to over 3,250 properties owned under long-term leases to major commercial and retail tenants.
ARCT owns and operates single-tenant freestanding commercial properties.
Realty Income also expects the acquisition to boost its dividends to shareholders by roughly 7 percent or 13 cents to an annualized rate of around $1.94 per share.
The deal is expected to be completed during the fourth quarter.
Realty Income continues to forecast 2012 FFO per share to range from $2.00 to $2.04 per share and sees adjusted AFFO of $2.06 to $2.11 per share. It expects 2013 AFFO of $2.31 to $2.37 per share.
Goldman, Sachs & Co. (GS) acted as exclusive financial advisor to ARCT on the deal. BofA Merrill Lynch and Wells Fargo Securities acted as exclusive financial advisors to Realty Income.
O shares ended at $42.48 on Wednesday, while ARCT stock closed at $11.96.