Realty Income To Buy Spirit Realty Capital For $9.3 Bln; Spirit Realty Up In Pre-market

(RTTNews) - Realty Income Corp. (O), a real estate investment trust, announced on Monday that it has entered into a definitive merger agreement with Spirit Realty Capital, Inc. (SRC) to acquire the latter in an all-stock transaction for about $9.3 billion.

Under the acquisition terms, Spirit shareholders will receive 0.762 newly-issued Realty Income common shares for each Spirit common share they own. Upon closing of the deal Realty Income shareholders will own 87 percent of the combined company and Spirit shareholders will own 13 percent.

As per the company, the leverage neutral transaction is expected to add over 2.5 percent to Realty Income's annualized Adjusted Funds from Operations per share. No new external capital is required to fund the deal and the company is pegging the acquisition to have an enterprise value of $63 billion once the merger is completed.

Realty Income expects to gain complementary real estate portfolio, along with maintaining or improving several key credit metrics as a result of this transaction.

The acquisition is expected to close during the first quarter of 2024.

In Pre-market activity, Realty Income shares are trading at $48.43 down 1.16% and Spirit Realty shares are trading at $36.58 up 13.08% on the New York Stock Exchange.