OAK BROOK, IL—Inland Real Estate Corp. said Tuesday it entered into a definitive agreement to be acquired by real estate funds managed by DRA Advisors LLC. Upon closing of the $2.3-billion deal, IRC will be a privately held REIT.

Sounding what has become a familiar theme in recent months, Thomas D'Arcy, IRC's non-executive chairman, says the REIT's board has been focused on "the options available to address the long-term discount at which the company's shares have traded versus private market valuations and its shopping center REIT peers." He adds that the board was unanimous in determining that the all-cash offer represents "the best course of action to address this valuation gap and provide our stockholders with strong relative value for their investment."

Adds Mark Zalatoris, IRC's president and CEO, "Over the years, our team has worked diligently to enhance the overall quality and performance of our retail portfolio. We are pleased DRA recognizes the value inherent in the retail platform we have established."

At New York City-based DRA, president David Luski calls IRC "a company with quality assets, a strong management team and great long-term potential. We look forward to closing the transaction and adding the IRC platform to our portfolio."  

The $10.60/share price represents a premium of about 6.6% over IRC's closing stock price on Monday, and an approximate 11.5% and 15.9% premium over the volume weighted average closing prices of IRC common stock over the 30-day and 60-day periods ended Dec. 14. IRC expects to pay regular monthly cash distributions of $0.0475 per share on the outstanding shares of its common stock until the merger closes.

In connection with the merger, DRA has obtained a commitment letter for debt financing from Wells Fargo Bank as lender and administrative agent, and Wells Fargo Securities, as sole lead arranger and bookrunner. The deal is expected to close in the first half of 2016, pending approval by IRC's shareholders.

BMO Capital Markets Corp. and Silver Portal Capital acted as financial advisors and Proskauer Rose LLP acted as legal counsel to IRC, while BMO Capital Markets also provided a fairness opinion to its board. Blank Rome LLP acted as legal counsel to DRA.