Realty Income Closes VEREIT Deal; Preps for Office Spinoff
The CEO says shares are now on a 5.5% annual growth rate.
Realty Income Corp. and VEREIT have closed on their previously announced merger, with Realty Income paying about $11 billion to create a combined company with an enterprise value of $50 billion.
The common stock of the combined company is now trading under the symbol “O” on the New York Stock Exchange.
Now that the deal has closed, the office properties are scheduled to be spun off on Nov. 12, into one new, self-managed publicly traded REIT with Realty Income continuing as the surviving public entity.
Realty Income will remain focused on single-tenant net lease retail and industrial properties in the US and UK.
Under the terms of the merger agreement, VEREIT stockholders were entitled to receive, for each share of VEREIT common stock held, 0.705 shares of Realty Income common stock.
Realty Income announced Q3 earnings after the bell on Monday and raised its AFFO per share guidance to $3.55 – $3.60, representing 5.5% annual growth, in some part due to the acquisition.
“The closing of the merger with VEREIT and our anticipated subsequent spin-off of substantially all of the combined companies’ office properties allows us to provide enhanced clarity on our anticipated near-term earnings run rate, demonstrating what we believe is a compelling risk/reward proposition for investors,” said Realty Income CEO Sumit Roy in prepared remarks.
“To that end, assuming the consummation of the spin-off as anticipated on November 12, we are increasing our 2021 AFFO per share guidance to $3.55 to $3.60, which includes increased acquisition guidance of over $5 billion, as well as introducing 2022 AFFO per share guidance of $3.84 – $3.97, representing 9.2% annual growth based on the midpoint,” Roy said.