Global Net Lease Acquires Modiv Industrial in $535M Deal
Global Net Lease (GNL) and Modiv Industrial (MDV) have entered into a definitive merger agreement under which GNL will acquire Modiv in an all-stock transaction valued at an enterprise value of approximately $535M. The transaction, once completed, will provide GNL with a portfolio of mission-critical industrial properties across the U.S. while also providing Modiv stockholders with an immediate 25% expected increase in annual dividends. The transaction is expected to be immediately 4% accretive to GNL's AFFO per share while remaining leverage neutral. GNL intends to fully repay all of Modiv's existing balance sheet debt and pay off Modiv's preferred stock using its Revolving Credit Facility and cash on hand, requiring no external capital to complete the transaction. Holders of Modiv common stock and operating partnership units will receive 1.975 newly-issued shares of GNL common stock or OP units for each share of Modiv common stock or OP unit they hold at the closing of the transaction, representing a total consideration of approximately $18.82 per Modiv share. This represents a 17% premium to Modiv's closing share price on May 1 and a 28% premium to Modiv's unaffected share price prior to its January 20 strategic update. Upon the closing of the transaction, existing GNL stockholders are expected to own approximately 89% of the combined company and Modiv stockholders are expected to own approximately 11%. The transaction is expected to result in the elimination of duplicative G&A expenses and other cost synergies, totaling approximately $6M of identified synergies expected to be captured annually. There are no anticipated changes to GNL's executive management team or Board of Directors in connection with the transaction. Completion of the transaction, expected in Q3, is subject to customary closing conditions. No approval of GNL stockholders will be required in connection with the transaction. Modiv does not plan to file its customary earnings release and supplemental information or to host a conference call to discuss its financial results for the quarter ended March 31 or subsequent quarters.
