New York-based American Realty Capital Properties Inc. (ARCP) recently announced that it has priced its underwritten public offering of 3.25 million shares at $10.00 per share, less underwriting discounts and commissions. The company has increased the size of its share offering by 0.25 million. In a bid to cover over-allotments, American Realty will provide a 30-day option to the underwriters for purchasing an additional 487,500 shares. The transaction is expected to close on June 18, 2012.
Robert W. Baird & Co. Inc., JMP Securities LLC and Ladenburg Thalmann & Co. Inc., a subsidiary of Ladenburg Thalmann Financial Services Inc. (LTS) acted as joint book-running managers while Maxim Group LLC and National Securities Corporation acted as co-managers of the share offering.
The company intends to utilize the proceeds generated from the transaction to repay outstanding debts and for other general corporate purposes including investing in additional properties. This public offering will enable American Realty to attain financial flexibility and seize accretive investment opportunities and acquisitions, which go a long way in enhancing top-line growth. As of March 31, 2012, American Realty's cash position stood at $768 million.
American Realty is focused on its strategy of portfolio optimization and increasing the tenant mix. Recently, the company acquired six FedEx Freight distribution facilities and one John Deere distribution facility at a combined purchase price of $38.3 million. The acquisitions were in line with ARCP's expectation of increasing the total size of portfolio to around $183.8 million, comprising 97 properties.
American Realty is a real estate investment trust (REIT) that owns and acquires single tenant freestanding commercial properties subject to net leases with high credit quality tenants. The company primarily invests in office and retail properties. As of May 8, 2012, the company owned 97 properties located in 16 states across the United States.
American Realty reported first quarter 2012 FFO (funds from operations) per share of 16 cents, which improved substantially from the Zacks Consensus Estimate of a loss of 19 cents. The company increased its 2012 estimated adjusted FFO per share guidance from the earlier range of 94 cents to 96 cents to the range of $1.04 to $1.07.
American Realty currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Taubman Centers Inc. (TCO), also has a Zacks #2 Rank.
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