PHOENIX, Jan. 29, 2015 /PRNewswire/ -- Cole Capital®, the wholly owned private capital management business and direct investment wholesale broker of American Realty Capital Properties, Inc. ("ARCP"), announced today the successful closing of the previously announced merger of Cole Corporate Income Trust, Inc. ("CCIT") with and into a wholly owned subsidiary of Select Income REIT ("SIR"). CCIT was the first office and industrial focused non-listed REIT managed by Cole Capital.
"The completion of this transaction provides CCIT stockholders with the opportunity for liquidity, while creating a market-leading office and industrial REIT," said William Stanley, interim Chairman and CEO of ARCP, which sponsors other non-listed REITs through Cole Capital. "Our experienced team was able to identify and successfully complete this strategic transaction, and now SIR shareholders have the opportunity to benefit from an increased enterprise value, attractive embedded growth potential and enhanced portfolio metrics. Additionally, this transaction reaffirms the value Cole Capital contributes to ARCP."
In connection with the merger, CCIT stockholders were given the opportunity to elect to receive either $10.50 in cash or 0.36 of a SIR common share in exchange for each share of CCIT held, subject to the limitation that no more than 60% of the CCIT shares be exchanged either for cash or SIR shares. Based on calculations by the Exchange Agent in the transaction, valid elections were made for approximately 77% of total CCIT shares outstanding. CCIT stockholders that did not make a valid election will receive share consideration in exchange for their shares. According to the Exchange Agent, the total number of shares electing to receive cash exceeded 60% of the total outstanding shares; therefore, CCIT shares for which a valid cash election was made will be prorated pursuant to the terms of the merger agreement. Accordingly, for stockholders that elected to have all of their CCIT shares exchanged for cash, the result of the proration will be that approximately 80% of those shares are exchanged for cash consideration and 20% are exchanged for share consideration. In lieu of any fractional SIR shares, former CCIT stockholders will receive cash.
SIR has reiterated its intention to increase its common share dividend to $2.00 per share annually from $1.92 per share (an increase of 4.2%) now that the CCIT acquisition is complete. Based on the increased distribution rate, each CCIT stockholder who received SIR shares as consideration will receive $0.72 annually on each 0.36 of an SIR share, a 10.8% increase from CCIT's annualized distribution of $0.65 per share.
In connection with the transaction, CCIT's advisor, a wholly owned affiliate of Cole Capital, received a disposition fee of $4.35 million, pursuant to the terms of its advisory agreement.
Wells Fargo Securities, LLC and Hentschel & Company acted as financial advisors to CCIT, and Morris, Manning & Martin, LLP and Venable LLP provided transaction counsel.
About Cole Corporate Income Trust, Inc.
CCIT was a public, non-listed REIT managed by Cole Capital that owned and managed "necessity corporate" properties. Necessity corporate properties are considered to be essential to the day-to-day operations of a corporation's business, which include distribution facilities, warehouses, manufacturing plants, and corporate or regional headquarters. CCIT started raising capital in 2011 and completed its $2.0 billion capital raise in September 2013. CCIT was acquired by Select Income REIT on January 29, 2015.
About Cole Capital®
Cole Capital is the private capital management business of American Realty Capital Properties, Inc. (NASDAQ: ARCP). As an industry leading non-listed REIT sponsor, Cole Capital creates innovative net lease real estate products that serve individual investors and financial professionals. Built on 35 years of experience and real estate acquisitions of more than $14 billion, Cole Capital's net lease strategy seeks to collect rent from industry-leading corporations and provide a stream of income to investors through non-listed REITs. Additional information about Cole Capital and its products can be found on its website at www.colecapital.com.
SOURCE Cole Corporate Income Trust, Inc.