Boston, MA 10/02/2014 (wallstreetpr) – RCS Capital Corp (NYSE:RCAP)‘s CEO, Michael Weil, said that the company expects an accretion of earnings of 51 cents a share. This excludes synergies, to its adjusted net income in 2016 from the acquisition of Cole Capital announced recently.
CEO Comments
The company’s CEO said that the acquisition of Cole Capital would add over $73 million to its recurring asset management EBITDA next year; its statement revealed. He said that the purchase was strategically and financially important to it and believed the combination to achieve significant tactical objectives through a single transaction.
Weil said that the acquisition allows RCS Capital Corp (NYSE:RCAP) to diversify its revenue base apart from adding real estate offerings to its product line. It also brings together the two big companies in the real estate’s net lease sector.
Acquisition of Cole Capital
RCS Capital Corp (NYSE:RCAP) has reached a definitive deal to buy broker-dealer firm, Cole Capital, from American Realty Capital Properties Inc (NASDAQ:ARCP) for consideration of $700 million besides contingent provision. The acquisition price consisted of $200 million each of cash and stock at a fixed value of $23.8156 a share and $300 million of seller debt.
The company disclosed that it would pay American Realty in cash and stock as agreed upon between them. While the seller financing comprised of an unsecured promissory note to American Realty with seven-year duration and an initial interest rate of 7.5% per year. This apart, the deal provides provision to pay a maximum of $130 million in early 2016 depending upon the actual EBITDA of Cole Capital next year.
Two Steps Closure
RCS Capital Corp (NYSE:RCAP) said that the transaction is likely to see closure in the fourth quarter of the current calendar year, subject to some regulatory closing conditions. The company indicated that the transaction would have two steps of closing. While the first one was after the completion of waiting period of the anti-trust, the second one involves the acquisition of Cole Capital’s assets and stock. The company would pay a part of the base price at the second closing and the remaining in April next year.
