American Realty Capital Trust Inc
American Realty Capital Trust — Merger or Acquisition (September 2012)
19 slides from American Realty Capital Trust's merger presentation, Sep 6, 2012
Slide 1: Acquisition of American Realty Capital Trust
7 Acquisition of
Slide 2: Company Overviews
Company Overviews 2 Realty Income (NYSE: O) is an $8.3 billion commercial real estate company with a Baa1/BBB/BBB+ (Moody’s/S$P/Fitch) credit rating Founded in 1969 to provide monthly dividends to shareholders through the ownership of net lease real estate 505 consecutive monthly dividends with 67 d
Slide 3: Transaction Overview
Transaction Overview 3 Total equity value of approximately $1.9 billion Implied 2013E AFFO multiple of 14.7x versus 19.7x for O (2) 100% stock transaction Each share of ARCT will be converted into O common shares at a fixed exchange ratio of 0.2874 Issuance of approximately 45.6 (1) million new O co
Slide 4: Realty Income's Transaction Rationale
Realty Income’s Transaction Rationale Improves credit quality of Realty Income’s portfolio 75% of rental revenue added is from investment grade tenants Realty Income increases revenue generated by investment grade tenants from 19% to 34% 4 Strategic Alignment Portfolio Enhancement Significant Financ
Slide 5: American Realty Capital Trust's Transaction Rationale
American Realty Capital Trust’s Transaction Rationale At $12.21 per share, including dividends, the compounded annual return to shareholders since NASDAQ listing on March 1, 2012 is over 40% 5 Attractive Return to Shareholders Valuation Size and Scale Opportunity to create the largest publicly-trade
Slide 6: Key Operational Metrics
Pro Forma (1) 2,762 501 3,263 28.8 15.7 44.5 97.3% 100.0% 97.7% 49 43 + PR 49 + PR 38 25 45 49% 64% 42% 19% 75% 34% 11.1 years 12.8 years 11.4 years Number of Properties Square Footage (mm) Wtd. Avg. Occupancy Number of States # Tenant Industries Top 15 Tenant Concentration % of Investment Grade Ten
Slide 7: Greater Tenant Diversification
# of % of Properties Annual Rent 34 6.0% 20 3.8% 29 3.7% 17 3.6% 52 3.2% 136 3.1% 18 2.5% 102 2.3% 146 2.2% 49 2.1% 147 2.1% 202 1.9% 6 1.9% 33 1.8% 79 1.8% Top 15 Total 1,070 42.0% # of % of Properties Annual Rent 20 5.2% 29 5.0% 17 4.9% 136 4.3% 18 3.3% 102 3.1% 146 3.0% 138 2.7% 202 2.6% 6 2.5% 4
Slide 8: Enhanced Industry Diversification
Convenience Stores 13% Restaurants 11% Theaters 7% Transportation Services 6% Health & Fitness 5% Drug Stores 7% Automotive Tire Services 4% Beverage 4% Grocery 3% Child Care 3% Convenience Stores 17% Restaurants 14% Theaters 9% Health & Fitness 7% Beverage 5% Automotive Tire Services 5% Child Care
Slide 9: Increased Property Type Diversification
Retail 77% Distribution 11% Manufacturing 2% Office 6% Industrial 1% Agriculture 3% Retail 86% Distribution 4% Manufacturing 2% Office 3% Industrial 1% Agriculture 4% Increased Property Type Diversification 9 Current (1) Note: Industries as defined by Realty Income Corporation. (1) Data based on ann
Slide 10: Geographic Diversity
Geographic Diversity Note: Regions as defined by Green Street Advisors. Source: Data based on annualized 2Q 2012 GAAP rental revenue per company filings and inclusive of fifteen recently announced acquisitions by ARCT. 2 2 PR 37 35 2 2 18 16 101 96 10 8 3 3 45 38 296 256 19 17 47 38 24 20 11 10 7 6
Slide 11: Improved Lease Maturity Schedule
15.2% 25.0% 59.8% 11.2% 25.8% 63.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 2012-2016 2017-2021 2022+ Realty Income Pro Forma Improved Lease Maturity Schedule 11 Realty Income reduces its near term lease rollover while extending its weighted average lease term Weighted Average Lease Term Current 11.1 yr
Slide 12: Increased Size and Scale
7,618 5,668 3,844 2,191 1,691 1,897 3,736 2,619 1,498 1,854 1,933 984 $11,354 $8,287 $5,343 $4,045 $3,624 $2,881 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 O (PF) O NNN EPR LXP ARCT Increased Size and Scale 12 Largest public triple net lease company by over two times Cost of capital and operatio
Slide 13: Consolidation Opportunity
Consolidation Opportunity 13 Estimated $1.5 to $2.0 trillion of U.S. real estate is held by corporate owners/users Highly fragmented market without a dominant type of investor Sector is underpenetrated by public companies Limited competition from investors due to constricted bank lending market Incr
Slide 14: Integration and Operational Synergies
Integration and Operational Synergies 14 property portfolio Minimal incremental cost will be required for integration No ARCT employees will remain with Realty Income directors Realty Income will realize an immediate financial benefit from the integration ARCT properties are similar to Realty Income
Slide 15: History of Dividend Increases
History of Dividend Increases (1) 15 67 dividend increases since 1994 NYSE listing 59 consecutive quarterly increases Realty Income will be able to increase its dividend to $1.94 per share (1) Annualized dividend amount reflects the December declared dividend rate per share multiplied by twelve, wit
Slide 16: Shareholder Return Chart
16 Shareholder Return Chart Note: All of these dividend yields are calculated as annualized dividend based on the last dividend paid in applicable time period divided by the closing price as of period end. Dividend yield sources: NAREIT website and Bloomberg. (1) FTSE NAREIT US Equity REIT Index as
Slide 17: Anticipated Transaction Timing
Anticipated Transaction Timing 17 Announce Transaction September 6, 2012 File Proxy October 2012 Close Transaction Late Q4 2012 / early Q1 2013
Slide 18: Realty Income and American Realty Capital Trust
Realty Income and American Realty Capital Trust 18 Strategic alignment-increased exposure to investment grade tenants Meaningful enhancement to portfolio profile Significant transaction that increases size and scale Immediate FFO and AFFO accretion Ability to increase dividend Balance sheet neutral
Slide 19: Forward-looking statements
This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements include, among others, statements of expectations, beliefs, future
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