Global sale and leaseback specialist WP Carey is to merge its publicly-held, non-traded REIT affiliate, Corporate Property Associates 16 – Global Incorporated (CPA:16 – Global), with WP Carey in a $4bn (€3bn) deal.
The merger is subject to approval by stockholders of WP Carey and CPA:16 – Global.
The combined company is expected to have a market capitalisation of $6.5bn and a total enterprise value of $10.1bn. The combined portfolio will consist of more than 700 properties with 78m m² of corporate real estate leased to 231 companies around the world. WP Carey will continue to manage the Corporate Property Associates (CPA) and Carey Watermark Investors (CWI) series of publicly-held, non-traded REITs.
Subject to the terms and conditions of the merger agreement, CPA:16 – Global stockholders will receive shares of WP Carey common stock for their shares of CPA:16 based on a value of $11.25 per share of CPA:16 – Global, and the volume weighted average trading price of WP Carey common stock.
WP Carey said that the benefits of the proposed merger include improvement in its earnings through increased portfolio diversification and by continuing the shift in revenue mix towards stable real estate rental income.
It also continues the company’s evolution from a hybrid LLC that derived the majority of its revenue from investment management fees into a leading global net lease REIT.
A merger would simplify WP Carey’s GAAP financial statements by consolidating joint ventures with CPA:16 – Global as well as its existing ownership interest in CPA:16 – Global.
