Carter Validus Mission Critical REIT Shareholders Approve Merger
October 2, 2019 | James Sprow | Blue Vault
Shareholders of Carter Validus Mission Critical REIT Inc. (“CVMC REIT I”) approved the company’s proposed merger with a wholly-owned subsidiary of fellow nontraded real estate investment trust Carter Validus Mission Critical REIT II Inc. (“CVMC REIT II”).
Under the terms of the deal, Carter Validus Mission Critical REIT will combine with and into Lightning Merger Sub LLC. Its shareholders will receive $1.00 in cash and 0.4681 share of Carter Validus Mission Critical REIT II’s Class A common stock for each Carter Validus Mission Critical REIT share they hold.
At a special shareholder meeting Sept. 26, 93,132,269.58 of the votes were cast in favor of the deal; 3,336,258.62 were against it; and 5,085,888.45 were abstentions.
The two REITs entered into an Agreement and Plan of Merger on April 11, 2019. The merger consideration was based upon the respective NAVs of the two REITs as of June 30, 2018. The NAV for Carter Validus Mission Critical REIT as of that date was $5.33 per share. The NAV for Carter Validus Mission Critical REIT II as of that date was $9.25. With the $1.00 per share cash payment and the 0.4681 shares in the surviving REIT, shareholders in Carter Validus Mission Critical REIT will have received $5.33 in combined cash and estimated per share NAV in Carter Validus Mission Critical REIT II.
In a conversation with Michael Seton, CEO and President of CVMC REIT I, Blue Vault learned that the estimated NAVs per share of both REITs remained approximately proportional since the June 30, 2018 determinations by both REITs.
The combined company after the REIT Merger or the Combined Company, will retain the name “Carter Validus Mission Critical REIT II, Inc.”
As of June 30, 2019, CVMC REIT II owned 85 properties, located in 43 markets, comprising approximately 5.8 million of rentable square feet with an aggregate purchase price of approximately $1.8 billion. The Company’s properties had a weighted average occupancy of 96.8% and weighted average remaining lease term of 9.4 years. The REIT’s portfolio included both healthcare properties (56) and data centers (29).
As of June 30, 2019, CVMC REIT I owned 60 properties, located in 32 markets, comprising approximately 2.57 million of rentable square feet. The Company’s properties had a weighted average occupancy of 91.5% and weighted average remaining lease term of 11.8 years. The REIT’s portfolio was all in healthcare-related assets.
On August 9, 2019, the board of directors of CVMC REIT II approved and authorized a daily distribution to the Company’s Class A, Class I, Class T and Class T2 stockholders of record as of the close of business on each day of the period commencing on September 1, 2019 and ending on September 30, 2019. The distributions will equal an annualized distribution rate of 6.40%, assuming a purchase price of $10.278 per Class A share, 7.04% assuming a purchase price of $9.343 per Class I share, 5.79% assuming a purchase price of $9.840 per Class T share, and 5.82% assuming a purchase price of $9.788 per Class T2 share.
Sources: SEC, Blue Vault
