American Realty Capital Properties Inc. (NASDAQ:ARCP): To Sell Assets For Red Lobster Acquisition


Dallas, Texas 05/23/2014 (FINANCIALSTRENDS) – American Realty Capital Properties Inc. (NASDAQ:ARCP) yesterday announced to have entered into an agreement with The Blackstone Group L.P. (NYSE:BX) affiliates to sell off a part of its portfolio worth $1.975 billion. The realty company will sell a major portion of its multi-tenant shopping center portfolio in all-cash deal. The company will use the proceeds from sell of these assets to finance its recently announced buyout of Red Lobster real estate portfolio for $1.5 billion. The company expects this sell off transaction to close within next 30 days. Earlier, the company was planning to spin-off the same portfolio into American Realty Capital Centers, Inc., a publicly traded REIT.

The company also recently priced a public offering, at $12 per common share, of 120 million shares. The company plans to use these proceeds to repay its outstanding debts and for other corporate purposes.

Red Lobster Acquisition

During last week, American Realty Capital Properties Inc. (NASDAQ:ARCP) announced to have entered into an agreement to acquire Red Lobster Real Estate for $1.5 billion in a sale-leaseback transaction. As a part of this transaction, American Realty will acquire around 500 restaurant properties of Red Lobster, which has high quality properties located in strong markets. Red Lobster is the renowned operator of seafood restaurants.

Following the purchased of Red Lobster properties, the company will accomplish its acquisition target for 2014 which was set at $3 billion. However, American Realty has enhanced its 2014 acquisition target by $1.5 billion to $4.5 billion for full year.

The Red Lobster Advantage:

The Red Lobster deal is considered a strategic fit for American Realty Capital Properties Inc. (NASDAQ:ARCP) as the company was intending to own net lease properties with high credit-quality tenants. The acquisition will create long-term shareholders’ value. The company has already strike a sale-leaseback deal for the Red Lobster portfolio, with Golden Gate Capital which involves contractual rent appreciations of 2% on an annual basis.

Stock Update:

On Thursday, the stock of American Realty gained 1.55% and closed at $12.45.