SAN FRANCISCO, April 19, 2015 /PRNewswire/ -- Prologis,
Inc. (NYSE: PLD), the global leader in industrial real estate,
today announced it has signed definitive agreements to acquire the
real estate assets and operating platform of KTR Capital Partners
(KTR) and its affiliates for a total purchase price of $5.9 billion. The properties comprise KTR's three
co-investment funds and will be acquired by Prologis U.S. Logistics
Venture (USLV), a 55-45 consolidated joint venture with Norges Bank
Investment Management (NBIM), manager of the Norwegian Government
Pension Fund Global.
"It is rare to have the opportunity to acquire a portfolio of
such high asset quality, customer profile and market composition
that is so consistent with our own," said Hamid Moghadam, chairman and CEO, Prologis. "I
have known KTR's leadership for 15 years and have always considered
them to be astute investors and one of our toughest competitors in
the U.S."
Moghadam added, "This transaction will deliver accretive returns
to our shareholders and will enhance our important and successful
partnership with NBIM, which will now exceed $11 billion on two continents."
The 60 million square foot operating portfolio comprises 322
properties and aligns with Prologis' investment strategy with
approximately 95 percent overlap with its existing U.S. portfolio.
Specifically, the transaction enhances the company's position in
Southern California, New Jersey, Chicago, South
Florida, Seattle and
Dallas. The acquisition also
includes 3.6 million square feet of development-in-progress and a
well-located land bank with a build-out potential of 6.8 million
square feet.
"We are extremely pleased to acquire KTR's outstanding property
portfolio and customer roster," said Eugene
Reilly, chief executive officer, Prologis Americas.
Transaction / Structure
The total consideration for the transaction is $5.9 billion, including the assumption of
approximately $700 million of secured
mortgage debt and the issuance of up to $230
million (less assumed liabilities) of common limited
partnership units in Prologis, L.P. to KTR.
Accretion / Cost Savings / Currency Benefits
The transaction is expected to be accretive to forecasted annual
core funds from operations (Core FFO) by approximately $0.14 per share, on a stabilized basis. This
represents 7 percent growth from the midpoint of Prologis' 2015
guidance. These estimates are made on a leverage-neutral basis over
the long term and include the effects from anticipated funding and
capitalization costs. Contemporaneously, Prologis has obtained a
commitment from Morgan Stanley Senior Funding, Inc. to provide a
$1.0 billion bridge facility for the
transaction, which provides ample capacity while maintaining
significant liquidity on its credit facilities. Additionally, the
transaction is expected to lower general and administrative
expenses as a percentage of assets under management by
approximately 12 percent and increase its U.S. dollar equity
exposure to 93 percent.
"We remain committed to maintaining our strong balance sheet,
which will continue to provide us with the flexibility to capture
market opportunities across the business cycle," said Tom Olinger, chief financial officer, Prologis.
"This highly accretive transaction advances our strategy of using
our scale to grow with minimal incremental overhead and
demonstrates the unique appeal and the strength of our currency
through our OP unit structure."
The transaction is anticipated to close in the next 30-60 days
and is subject to customary closing conditions.
Conference Call and Webcast Information
Prologis will host a webcast and conference call to discuss the
transaction tomorrow, April 20, at
8 a.m. U.S. Eastern time. A
presentation related to the transaction will be available tomorrow,
April 20, at 7:30 a.m. U.S. Eastern time. Interested parties
are encouraged to access the webcast and presentation by clicking
the "Events and Presentations" link on the landing page of the
Prologis Investor Relations website (http://ir.prologis.com).
Interested parties also can participate via conference call by
dialing +1 877 256 7020 (toll-free from the U.S. and Canada) or +1 973 409 9692 (from all other
countries) and entering conference code 48765488.
A telephonic replay will be available April 20-May 20 at +1 855 859 2056 (from the U.S.
and Canada) or +1 404 537 3406
(from all other countries) using conference code 48765488. The
webcast replay will be posted when available in the "Events and
Presentations" section of Investor Relations on the Prologis
website.
About Prologis
Prologis, Inc., is the global leader in industrial real estate.
As of March 31, 2015, Prologis owned
or had investments in, on a wholly owned basis or through
co-investment ventures, properties and development projects
expected to total approximately 594 million square feet (55 million
square meters) in 21 countries. The company leases modern
distribution facilities to more than 4,700 customers, including
third-party logistics providers, transportation companies,
retailers and manufacturers.
Forward-Looking Statements
The statements in this press release that are not historical
facts are 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. Words such as
"expects," "anticipates," "intends," "plans," "believes," "seeks,"
"estimates," variations of such words and similar expressions are
intended to identify such forward-looking statements, which
generally are not historical in nature. For instance, the
statements in this document relating to expected or anticipated
benefits of the KTR Acquisition, including stabilized Core FFO,
general and administrative expenses, the future financial
performance of Prologis post-acquisition, cost synergies and
portfolio benefits, increases to U.S. dollar currency exposure and
enhancements to customer relationships are forward-looking
statements. These forward-looking statements are based on current
expectations, goals, estimates and projections about the industry
and markets in which Prologis operates, management's beliefs and
assumptions made by management and are not predictions or
guarantees of actual performance. Such statements involve
uncertainties, assumptions and risks that are difficult to predict.
Although Prologis believes the expectations reflected in any
forward-looking statements are based on reasonable assumptions,
Prologis can give no assurance that its expectations will be
attained and therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such
forward-looking statements depending on a number of factors
affecting Prologis' business, KTR's business and risks associated
with the acquisition and related transactions. Some of these
factors include, but are not limited to: (i) the inherent
uncertainty associated with financial projections, (ii) risks and
uncertainties relating to Prologis' ability to successfully close
the KTR Acquisition and to subsequently integrate KTR's assets and
the ability to recognize the anticipated synergies and benefits of
the KTR Acquisition, (iii) access to available financing (including
financing for the acquisition) and capital on a timely basis and on
reasonable terms, (iv) the receipt of required third party
approvals, (v) national, international, regional and local economic
climates, (vi) changes in financial markets, interest rates and
foreign currency exchange rates, (vii) increased or unanticipated
competition for its properties, (viii) risks associated with other
acquisitions, dispositions and development of properties, (ix)
maintenance of real estate investment trust ("REIT") status and tax
structuring, (x) the levels of debt that Prologis maintains and its
credit ratings, (xi) risks related to its investments in its
co-investment ventures and funds, including its ability to
establish new co-investment ventures and funds, (xii) risks of
doing business internationally, including currency risks, (xiii)
environmental uncertainties, including risks of natural disasters,
and (xiv) those additional factors discussed in reports filed with
the Securities and Exchange Commission by Prologis under the
heading "Risk Factors." Prologis undertakes no duty to update any
forward-looking statements appearing in this press release.
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SOURCE Prologis, Inc.