W. P. Carey Inc. Reit · NYSE:WPC
W. P. Carey Inc. Reit — W. P. Carey — Merger or Acquisition (June 2018)
19 slides from W. P. Carey Inc. Reit's merger presentation, June 2018
Slide 1: Proposed Merger with CPA:17 – Global
Proposed Merger with CPA® :17 – Global June 2018
Slide 2: Transaction Overview
Transaction Overview • 100% stock acquisition by W. P. Carey (NYSE: WPC) of CPA®: – 17 Global (CPA:17) Transaction • Fixed exchange ratio of 0.160x shares of WPC common stock for each share of CPA:17 common stock Consideration • Implied price of $10.72 per each share of CPA:17 common stock based on
Slide 3: Strategic Rationale and Transaction Benefits
Strategic Rationale and Transaction Benefits Further simplifies WPC’s business and accelerates its strategy to focus exclusively on net lease investing Accelerates “Pure- for its balance sheet Play” Strategy Higher-multiple Real Estate segment is expected to generate approximately 96% of total p
Slide 4: More Valuable Earnings
More Valuable Earnings • Real Estate earnings are generally ascribed a higher multiple by investors given the long-term, recurring nature of the underlying income relative to finite Investment Management earnings • Improved earnings mix results in a higher pro forma AFFO multiple, even at implied mu
Slide 5: Significantly Increases Size, Scale and Prominence
Significantly Increases Size, Scale and Prominence Largest REITs in the MSCI US REIT index ($B) Largest Net Lease REITs by Equity Market Capitalization ($B) (2) Company Company Equity Equity market Market cap Cap . 1 Simon Property Group, Inc. $50.9 2 Public Storage 37.3 3 Prologis, Inc. 34.1 4 Equi
Slide 6: Overview of CPA:17
Overview of CPA:17 CPA:17 is the largest fund advised by WPC and owns a high-quality, diversified, primarily net lease portfolio Net Lease Assets by Property Type (1) Capitalization ($MM) March 31, 2018 1% Purchase Price Per Share (3) $10.72 5% 15% Shares Outstanding (MM) 354 28% Equity Market Capit
Slide 7: Combined Company Portfolio Overview
Combined Company Portfolio Overview Pro Forma Number of 886 411 1,159 Properties (1) Number of Tenants (1) 208 114 302 Square Footage (MM) 85 44 129 ABR ($MM) (2) $689 $379 $1,068 Weighted-Average 9.7 years 11.5 years 10.4 years Lease Term (2) Occupancy (%) 99.7% 99.7% 99.7% % of Investment 27.6% 31
Slide 8: Pro Forma Portfolio Diversification Consistent with WPC's Current Portfolio
Pro Forma Portfolio Diversification Consistent with WPC’s Current Portfolio By Property Type Top 10 Tenants Rank Tenant Location % of Total 1. Europe 4.7% 3% 2. North America 3.4% 8% Industrial 24% 24% 3. Europe 2.8% Warehouse 19% 19% 4. Europe 2.8% Office 26% 5. North America 2.5% Retail 19% 19% 6.
Slide 9: Extends Weighted-Average Lease Term and Lease Maturities
Extends Weighted-Average Lease Term and Lease Maturities Pro forma lease term of 10.4 years is among the highest for the net lease sector Weighted Average Lease Term (years) (1) 14.0 11.4 10.4 9.7 9.6 9.4 9.3 9.2 8.9 8.6 4.7 STOR NNN WPC WPC SRC O VER SIR LXP GNL STAG (PF) (Current) Lease Expiration
Slide 10: Transaction Enhances Credit Profile
Transaction Enhances Credit Profile Decreases debt to gross assets from 49% to below 44% (1) Pro Forma Capitalization ($MM) March 31, 2018 Market Capitalization (2) $10,919 Clear path to reducing secured debt through prepayment of debt with minimal frictional costs Mortgage Debt, pro rata 3,167
Slide 11: Maintains Well-Laddered Debt Maturity Profile
Maintains Well-Laddered Debt Maturity Profile Current Debt Maturity Schedule as of 3/31/18 (3) Mortgage Debt, pro rata (1) Unsecured Revolving Credit Facility (2) Unsecured Bonds (EUR) (3) Unsecured Bonds (USD) 1,200 1,000 500 800 $ MM 600 400 616 616 450 616 200 267 350 32 47 225 203 108 91 3 55 19
Slide 12: Continues WPC's History of Long-term Shareholder Value Creation
Continues WPC’s History of Long-term Shareholder Value Creation Total Shareholder Return Since CPA:15 Merger and REIT Conversion in 2012 WPC Peers (2) RMS Events 130% January 2014: Received investment grade June 2017: Announced strategy to exit ratings of BBB / Baa2 with stable outlook retail fundra
Slide 13: Increased Contribution from Real Estate
Increased Contribution from Real Estate • Further simplifies WPC’s business and accelerates its strategy to focus exclusively on net lease investing for its balance sheet • Higher multiple Real Estate segment is expected to generate approximately 96% of total pro forma AFFO, up from 83% currently (1
Slide 14: A Compelling Transaction for W. P. Carey
A Compelling Transaction for W. P. Carey Accelerates execution of strategy to focus exclusively on net lease investing for its balance sheet Significantly increases earnings derived from “higher-multiple” recurring Real Estate revenues Enhances portfolio by increasing diversification and exten
Slide 15: Cautionary Statement Concerning Forward-Looking Statements
Cautionary Statement Concerning Forward-Looking Statements Certain of the matters discussed in this communication constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, both as amended by the Private Securities Litigation Refor
Slide 16: Additional Information and Where to Find it
Additional Information and Where to Find it This presentation shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration o
Slide 17: Disclosures
Disclosures The following non-GAAP financial measures are used in this presentation FFO and AFFO Due to certain unique operating characteristics of real estate companies, as discussed below, the National Association of Real Estate Investment Trusts, Inc., or NAREIT, an industry trade group, has prom
Slide 18: Disclosures (cont'd)
Disclosures (cont’d) The following non-GAAP financial measures are used in this presentation (cont’d) MFFO and MFFO, adjusted We define MFFO consistent with the IPA’s (formerly known as the Investment Program Association) Practice Guideline 2010-01, Supplemental Performance Measure for Publicly Regi
Slide 19: Disclosures (cont'd)
Disclosures (cont’d) The following non-GAAP financial measures are used in this presentation (cont’d) EBITDA and Adjusted EBITDA We believe that EBITDA is a useful supplemental measure to investors and analysts for assessing the performance of our business segments because (i) it removes the impact