Industrial Logistics Properties Trust (Nasdaq: ILPT) said Nov.5 it has agreed to purchase Monmouth Real Estate Investment Corp. (NYSE: MNR) in an all-cash transaction valued at approximately $4 billion, including debt. The transaction is expected to close in the first half of 2022.
Earlier this year, Equity Commonwealth (NYSE: EQC) said it would acquire Monmouth in an all-stock transaction valued at $3.4 billion, including debt. That offer was subsequently rejected by shareholders. Monmouth also received an unsolicited proposal from Starwood Capital Group. In September, Monmouth announced that it “heard loudly and clearly the voices of our stockholders” and would re-initiate exploring strategic alternatives.
The deal with ILPT involves a transaction price of $21.00 per share, which is a 24% premium to the unaffected closing share price of $16.99 on Dec. 18, 2020 and a 36% premium to the 30-day volume weighted average unaffected trading share price of $15.43.
Michael Landy, president and CEO of Monmouth, said “the substantial interest in our company is a testament to our success building a best-in-class net-leased industrial real estate portfolio that is well positioned to benefit from the accelerated adoption of e-commerce.”
John Murray, CEO of ILPT, said the transaction more than doubles the properties in ILPT’s mainland portfolio and this scale is expected to expand the company’s growth opportunities and access to capital .
The acquisition of the Monmouth portfolio includes 126 industrial and logistics properties across 32 states with an average age of approximately nine years. The properties are 99.7% occupied with a weighted average lease term of approximately eight years, and over 80% of annual rents come from investment grade tenants.
ILPT said that in order to finance the acquisition it 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 and does not currently plan to issue common shares in connection with the deal.