W.P. Carey, CPA:18 to Merge in $2.7B Deal
March 1, 2022 | Barbra Murray | Commercial Property Executive
This deal will make W.P. Carey a top 25 REIT in market capitalization.
W.P. Carey Inc., one of the largest net lease REITs, has entered into a definitive merger agreement to acquire Corporate Property Associates 18 – Global Inc., a public non-traded REIT with a diversified portfolio of net lease commercial real estate properties, in a transaction valued at $2.7 billion. Upon completion of the merger, W. P. Carey will have a combined enterprise value of $23.4 billion.
W.P. Carey serves as adviser to CPA:18, which closed its two-year initial public offering in 2015. Under the terms of the merger agreement, CPA:18 stockholders will receive 0.0978 of a share of W. P. Carey common stock plus $3.00 of cash for each share of CPA:18 common stock, marking a total initial implied value of $10.45 per share. W. P. Carey plans to partially fund the cash portion of the CPA:18 acquisition through the disposition of certain office properties in Europe and one student housing property. The deal includes the assumption of approximately $1 billion of existing mortgage debt.
The analyst community views the impending merger favorably. “It’s a good move for WPC strategically, as they are very familiar with the assets and can transition the ownership fairly effortlessly, while the acquisition simplifies the story for WPC, which investors tend to reward,” John Kim, real estate analyst with BMO Capital Markets, told Commercial Property Executive. “WPC will also increase its scale and become a top 25 REIT in market capitalization, which tends to attract a larger investor base, and may be beneficial to WPC’s cost of capital.”
