RCS Capital To Buy Cole Capital For $700 Mln - Quick Facts

(RTTNews) - RCS Capital Corp. (RCAP) has agreed to acquire Cole Capital Partners, LLC and Cole Capital Advisors, Inc. from American Realty Capital Properties, Inc. (ARCP) for $700 million plus contingent consideration. Cole Capital is the private capital management business of ARCP, that includes a broker-dealer, wholesale distribution, and a non-traded real estate investment trust, or REIT, sponsor and advisory businesses.

RCAP would purchase Cole Capital for a base purchase price of $700 million, comprising $200 million cash, $300 million of seller debt, and $200 million of RCAP Class A common stock. RCAP's common stock would be valued at a fixed price of $23.8156 a share, equivalent to the volume weighted average price of the common stock for the ten days ended September 29, 2014. Pursuant to the agreement with ARCP, RCAP may pay the common stock portion of the consideration in cash or stock. The seller financing consists of a 7-year, unsecured promissory note from RCAP to ARCP, with an initial interest rate per annum of 7.5%, pre-payable by RCAP after December 31, 2015.

In addition to the base purchase price, ARCP may earn up to an additional $130 million, payable in early 2016, based upon Cole Capital's actual 2015 EBITDA.

RCAP expects the transaction to contribute $0.51 per share to 2015 adjusted net income, excluding synergies, assuming the $200 million of stock compensation is paid in cash versus stock, depending on the amount of additional consideration paid in 2016. The transaction may close in the fourth quarter of 2014.