“AFCO's high-quality assets will further increase FPI's diversification across crops and geographies,” says Paul Pittman, chairman and CEO of FPI. “As a result of increased scale, we expect to realize a reduction in overall costs as a percentage of portfolio value, creating superior value for our and AFCO's stockholders. We also look forward to working with the exceptional tenants who operate on AFCO's farms.”

Pittman will continue as FPI's chairman and CEO once the merger closes. D. Dixon Boardman and Thomas S. T. Gimbel, AFCO's chairman and CEO, respectively, will join FPI's board of directors.

FPI expects to consolidate AFCO's operations into the former's existing Denver-based headquarters and to realize significant cost synergies through eliminating duplicate administrative and other public company costs. As a result of cost savings and higher capitalization rates associated with specialty crops, FPI expects the transaction to be approximately 10% accretive to its adjusted funds from operations per share in 2017, growing to 20% accretive as synergies are fully realized.

Shares will continue trading under the FPI stock ticker, while AFCO stock is expected to be delisted after the close of trading on Thursday. FPI held its initial public offering in April of 2014.

In a December interview with REIT.com, Pittman said the biggest difference between farmland REITs and REITs in other property segments is the efficiency of the business model. FPI at the time had a staff of about 15 employees. The company could increase the size of its portfolio by up to 50% without adding any additional employees, Pittman told REIT.com.

Overall, Pittman said, “This market is driven by that ever-increasing global food demand in the face of land scarcity. Nothing about the long-term outlook for food demand has changed.”

DENVER—Shareholders in agricultural REITs Farmland Partners Inc. (FPI) and American Farmland Co. (AFCO) on Tuesday approved the two companies' merger, which is expected to close on Thursday. First announced this past September, the stock-for-stock merger will create a publicly traded farmland REIT with a market capitalization of approximately $400 million and holdings of more than 144,000 acres across 16 states on both coasts and in the Midwest and Delta regions, valued at more than $950 million.

That tally includes approximately 8,600 acres of Illinois farmland that the company agreed to buy in December of last year, after its merger with AFCO had been announced. FPI is already the largest farmland REIT in the US; the combination with AFCO will solidify its position.

Post-merger, FPI will have more than 100 tenant farmers who grow more than 26 major commercial crops, with what the REIT says will be broad diversification across the company's portfolio. FPI generally doesn't operate properties, but leases its farmland to some of the nation's leading producers.

On a consolidated basis, the combined FPI/AFCO portfolio is expected to consist of approximately 75% primary row crop farmland and 25% specialty crops (fresh fruits and vegetables and permanent crops) by value. At present, FPI's portfolio consists mainly of row crop farmland.

“AFCO's high-quality assets will further increase FPI's diversification across crops and geographies,” says Paul Pittman, chairman and CEO of FPI. “As a result of increased scale, we expect to realize a reduction in overall costs as a percentage of portfolio value, creating superior value for our and AFCO's stockholders. We also look forward to working with the exceptional tenants who operate on AFCO's farms.”

Pittman will continue as FPI's chairman and CEO once the merger closes. D. Dixon Boardman and Thomas S. T. Gimbel, AFCO's chairman and CEO, respectively, will join FPI's board of directors.

FPI expects to consolidate AFCO's operations into the former's existing Denver-based headquarters and to realize significant cost synergies through eliminating duplicate administrative and other public company costs. As a result of cost savings and higher capitalization rates associated with specialty crops, FPI expects the transaction to be approximately 10% accretive to its adjusted funds from operations per share in 2017, growing to 20% accretive as synergies are fully realized.

Shares will continue trading under the FPI stock ticker, while AFCO stock is expected to be delisted after the close of trading on Thursday. FPI held its initial public offering in April of 2014.

In a December interview with REIT.com, Pittman said the biggest difference between farmland REITs and REITs in other property segments is the efficiency of the business model. FPI at the time had a staff of about 15 employees. The company could increase the size of its portfolio by up to 50% without adding any additional employees, Pittman told REIT.com.

Overall, Pittman said, “This market is driven by that ever-increasing global food demand in the face of land scarcity. Nothing about the long-term outlook for food demand has changed.”