Le Lézard
Classified in: Covid-19 virus
Subjects: Merger/Acquisition, Conference Call, Webcast

Industrial Logistics Properties Trust to Acquire Monmouth Real Estate Investment Corporation for $4.0 Billion


Industrial Logistics Properties Trust (Nasdaq: ILPT) today announced that it has entered into a definitive agreement to acquire all of the outstanding shares of Monmouth Real Estate Investment Corporation (NYSE: MNR) for $21.00 per share in an all-cash transaction, valued at approximately $4.0 billion, including committed MNR acquisitions, transaction costs and the assumption of $409 million of debt. The transaction adds 126 new, Class A, single tenant, net leased, e-commerce focused industrial properties to ILPT's existing high-quality portfolio and improves geographic and tenant diversity. The portfolio contains over 26 million square feet of space, has a weighted average remaining lease term of approximately 8 years, is over 80% leased to investment grade rated tenants and generates annualized rental revenue of $169.4 million. ILPT expects this transaction to be immediately accretive to Normalized Funds from Operations, or FFO, per share.

John Murray, Chief Executive Officer of ILPT, made the following statement:

"This transaction adds 126 high-quality industrial assets to ILPT's portfolio and expands ILPT's ability to benefit from ongoing strong fundamental tailwinds in the industrial sector. This accretive transaction more than doubles the properties in ILPT's mainland portfolio and this scale is expected to expand ILPT's growth opportunities and access to capital which we expect will drive cash flow growth and long-term value for our shareholders."

Certain highlights of the acquired portfolio include:

Certain expected benefits of the transaction include:

Deal Structure, Approvals and Timing

To finance this acquisition, ILPT expects to enter into a joint venture with one or more institutional investors for equity investments of between approximately $430 million and $1.3 billion. Accordingly, ILPT does not currently plan to issue common shares in connection with this transaction. ILPT plans to finance the balance of the $4.0 billion purchase with proceeds from new mortgage debt and the assumption of approximately $409 million of existing MNR mortgage debt. Depending on the ultimate size of the joint venture equity investments, ILPT may also use proceeds from the sale of up to approximately $1.6 billion of MNR properties to finance this transaction. Following the closing of the acquisition and execution of the financing plan described above, consolidated net debt to Adjusted EBITDAre is expected to be between 6 and 8 times at year end 2022. To ensure ILPT can finance the closing of this transaction, ILPT has secured commitments from lenders for a $4.0 billion bridge loan facility.

The transaction is subject to customary closing conditions, including MNR shareholder approval, and is expected to close in the first half of 2022.

Non-GAAP Financial Measures

ILPT refers to Normalized FFO and Adjusted EBITDAre in this press release. Normalized FFO and Adjusted EBITDAre are "non-GAAP financial measures" within the meaning of the applicable rules of the SEC. For a calculation and definition of these measures, and a reconciliation to net income, please see ILPT's Third Quarter 2021 Supplemental Operating and Financial Data, or the Supplemental. The Supplement was attached as Exhibit 99.2 to ILPT's Current Report on Form 8-K furnished with the SEC on October 27, 2021. In addition, please see the Supplemental for statements as to why ILPT's management believes that these measures provide useful information to investors and additional purposes for which ILPT management uses this measure.

Advisors

Citigroup is acting as exclusive financial advisor, Hunton Andrews Kurth LLP is serving as legal advisor on the transaction and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor on the bridge financing to ILPT. Joint lead arrangers and bookrunners for the bridge loan are Citigroup Global Markets Inc. and UBS Securities LLC.

Conference Call

On Friday, November 5, 2021, at 8:30 a.m., Eastern time, ILPT will host a conference call to discuss the acquisition. Following management's remarks, there will be a question and answer period. ILPT will also provide a presentation in advance of the conference call regarding the transaction that will be available at ILPT's website at www.ilptreit.com and as an exhibit to a Current Report on a Form 8-K furnished with the Securities and Exchange Commission, or SEC.

The conference call telephone number is 877-418-4826. Participants calling from outside the United States and Canada should dial 412-902-6758. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available for about one week after the call. To hear the replay, dial 412-317-0088. The replay pass code is 10161961.

A live audio webcast of the conference call will also be available in a listen-only mode on ILPT's website at www.ilptreit.com. Participants wanting to access the webcast should visit ILPT's website about five minutes before the call. The archived webcast will be available for replay on ILPT's website after the call.

About Industrial Logistics Properties Trust

Industrial Logistics Properties Trust (Nasdaq: ILPT) is a real estate investment trust, or REIT, focused on owning and leasing high quality distribution and logistics properties that serve the growing needs of e-commerce. ILPT's portfolio consists of more than 290 properties containing approximately 36 million rentable square feet leased to over 260 tenants in 33 states. More than 70% of ILPT's annual rental revenues are derived from investment grade tenants, tenants that are subsidiaries of investment grade rated entities or Hawaii land leases. ILPT is managed by an operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company with more than $32 billion in assets under management and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. ILPT is headquartered in Newton, MA. For more information, visit ilptreit.com.

WARNING CONCERNING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based upon ILPT's present beliefs and expectations, but these statements and the implications of these statements are not guaranteed to occur and may not occur for various reasons, some of which are beyond ILPT's control. For example:

The information contained in ILPT's filings with the Securities and Exchange Commission, or SEC, including under the caption "Risk Factors" in ILPT's periodic reports or incorporated therein, identifies important factors that could cause ILPT's actual results to differ materially from those stated or implied by ILPT's forward-looking statements. ILPT's filings with the SEC are available at the SEC's website at www.sec.gov.

You should not place undue reliance upon forward-looking statements.

Except as required by law, ILPT does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.

NO SOLICITATION

ILPT, its directors and executive officers are not soliciting proxies from the shareholders of MNR in connection with the proposed acquisition and are not participants in the solicitation of proxies by MNR, nor is this communication an offer to buy or sell any securities. ILPT is making this communication for informational purposes only and does not intend to file any communication relating to the merger on a proxy statement on Schedule 14A with the SEC.


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