Sam Zell’s Equity Commonwealth Agrees to Acquire Monmouth Industrial REIT
Equity Commonwealth and Monmouth Real Estate Investment Corporation have reached a merger agreement by which Equity Commonwealth will acquire Monmouth in an all-stock transaction, valued at approximately $3.4 billion, including the assumption of debt. The combined company is expected to have a pro forma equity market capitalization of approximately $5.5 billion.
Equity Commonwealth and Monmouth shareholders are expected to own approximately 65% and 35%, respectively, of the pro forma company following the deal’s closing.
“The transaction provides Equity Commonwealth with a high-quality, net-leased industrial business with stable cash flows while preserving EQC’s balance sheet capacity for future acquisitions,” said Sam Zell, chairman of the board of Equity Commonwealth.
Holmdel, NJ-based Monmouth’s portfolio includes 120 properties totaling 24.5 million square feet. The REIT also has six properties totaling 1.8 million square feet under contract and leased to investment-grade tenants. Closings for these acquisitions are expected in 2021 and 2022.
Following the merger announcement, Blackwells Capital LLC, which made an unsolicited offer for Monmouth last December, issued a statement saying, “We intend to review the merger documents and proxy when disclosed and consider our options. The transaction as disclosed is wholly inadequate. The industrial REIT space has materially re-rated since our $18 per share offer in December.
“Had the company engaged with Blackwells, its fourth largest shareholder, and not excluded it from the process, they would have seen we were prepared to potentially increase our all cash offer. Shareholders should be inherently suspicious of a transaction that is more aligned with the Landy family’s interests than maximizing value.”
- ◦Acquisition