Inland Real Estate Switches to Private Hands

Last December, D’Arcy called the DRA deal the best option to close a “valuation gap.”

OAK BROOK, IL—Inland Real Estate Corp. said Wednesday that funds managed by DRA Advisors LLC have completed their acquisition of the company, merging IRC with Midwest Retail Acquisition Corp., an indirect wholly owned subsidiary of the funds. IRC shares ceased trading on the New York Stock Exchange at the close of the markets Wednesday, and the business will now be known as IRC Retail Centers Inc., a privately held REIT. IRC shareholders last week approved DRA’s acquisition of the company, in a deal valued at $2.3 billion including the assumption of debt. The deal was first announced this past December. At the time, Thomas D’Arcy, IRC’s non-executive chairman, said the REIT’s board had 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 added that the board was unanimous in determining that the all-cash offer from DRA represented “the best course of action to address this valuation gap and provide our stockholders with strong relative value for their investment.” At New York City-based DRA, president David Luski in December called 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.” As of this past Dec. 31, IRC owned interests in 132 fee simple investment properties, including 36 owned through its unconsolidated joint ventures, with aggregate leasable space of approximately 15 million square feet. The properties are located across 11 states in the Midwest and Southeast. In connection with the merger, DRA has obtained debt financing from Wells Fargo Bank and Bank of America as the initial lenders, with Wells Fargo Bank also serving as administrative agent, BofA as a syndication agent and Wells Fargo Securities and Merrill Lynch serving as joint lead arranger and joint bookrunner. DRA also obtained debt financing from investment funds managed by an affiliate of Apollo Global Management. BMO Capital Markets Corp. and Silver Portal Capital acted as financial advisors to IRC, and Proskauer Rose LLP acted as its legal counsel. Blank Rome LLP served as legal counsel to DRA.

Last December, D’Arcy called the DRA deal the best option to close a “valuation gap.”