Prologis to Acquire Liberty Property Trust in $12.6B All-Stock Deal
SAN FRANCISCO AND MALVERN, PA. — San Francisco-based Prologis Inc. has entered into a definitive agreement to acquire Pennsylvania-based Liberty Property Trust in an all-stock transaction valued at approximately $12.6 billion, inclusive of outstanding debt. The deal between the two industrial REITs is expected to close in the first quarter of 2020.
Under the terms of the agreement, Prologis (NYSE: PLD) will acquire roughly 107 million square feet of stabilized logistics space, 5.1 million square feet of logistics product in various stages of development and 1,684 acres with a future build-out potential totaling 19.7 million square feet.
In addition, Liberty (NYSE: LPT) shareholders will receive 0.675 in shares of Prologis common stock for each Liberty share they own. Both the board of directors of Prologis and the board of trustees of Liberty have unanimously approved the transaction.
Prologis plans to dispose of $3.5 billion in assets, including $2.8 billion of non-strategic logistics properties and $700 million of office properties, to help finance the acquisition.
“The joining of these two platforms at this moment, when industrial logistics has become so pivotal to the new economy, will further the industry’s ability to support the nation’s supply chain and enhance value creation for our combined shareholders,” said Bill Hankowsky, Liberty chairman and CEO.
“Liberty’s logistics assets are highly complementary to our U.S. portfolio and this acquisition increases our holdings and growth potential in several key markets,” added Prologis chairman and CEO Hamid Moghadam. “The strategic fit between the portfolios allows us to capture immediate cost and long-term revenue synergies.”
More specifically, the transaction will allow Prologis to increase its footprints in markets like Lehigh Valley, Chicago, Houston, Central Pennsylvania, New Jersey and Southern California.
BofA Securities and Morgan Stanley are acting as financial advisors and Wachtell, Lipton, Rosen & Katz is serving as legal advisor to Prologis. Goldman Sachs and Citigroup are acting as financial advisors and Morgan, Lewis and Bockius LLP is serving as legal advisor to Liberty.
Prologis’ stock price opened at $87.72 per share on Monday, Oct. 28, up from $65 per share a year ago. As of late September, the company’s total inventory spanned approximately 797 million square feet across 19 countries.
Liberty’s stock price opened at $58.80 per share on Monday, Oct. 28, up about 16 percent from the closing price on Friday, Oct. 25. The company’s stock price has risen by approximately 36 percent from its mark of $43.23 per share a year ago.
— Taylor Williams