Item 8.01. Other Events.
Financial Information of VEREIT and VEREIT OP
As previously disclosed, on April 29, 2021, Realty Income Corporation (the
"Company" or "Realty Income")) entered into an Agreement and Plan of Merger (the
"Merger Agreement") with VEREIT, Inc., a Maryland corporation ("VEREIT"), VEREIT
Operating Partnership, L.P., a Delaware limited partnership ("VEREIT OP"), Rams
MD Subsidiary I, Inc., a Maryland corporation and wholly owned subsidiary of
Realty Income ("Merger Sub 1"), and Rams Acquisition Sub II, LLC, a Delaware
limited liability company and wholly owned subsidiary of Realty Income ("Merger
Sub 2"). The Merger Agreement provides for, subject to the terms and conditions
thereof, the combination of the Company and VEREIT through (i) a merger of
Merger Sub 2 with and into VEREIT OP, with VEREIT OP continuing as the surviving
entity (the "Partnership Merger") and (ii) immediately thereafter, a merger of
VEREIT with and into Merger Sub 1, with Merger Sub 1 continuing as the surviving
corporation (the "Merger" and together with the Partnership Merger, the
"Mergers").
The Company is filing this Current Report on Form 8-K to provide certain
financial information with respect to the proposed Mergers. Specifically, this
Current Report on Form 8-K provides: (1) the audited consolidated financial
statements of VEREIT and VEREIT OP as of December 31, 2020 and 2019, and for
each of the years in the three year period ended December 31, 2020, attached
hereto as Exhibit 99.1 and incorporated herein by reference, (2) the unaudited
consolidated financial statements of VEREIT and VEREIT OP as of March 31, 2021
and for the three month periods ended March 31, 2021 and 2020, attached hereto
as Exhibit 99.2 and incorporated herein by reference, and (3) the Company's
unaudited pro forma condensed combined financial statements as of and for the
three month period ended March 31, 2021 and for the year ended December 31,
2020, relating to the proposed Mergers, attached hereto as Exhibit 99.3 and
incorporated herein by reference. Such unaudited pro forma condensed combined
financial statements have been prepared on the basis of certain assumptions and
estimates and are subject to other uncertainties and do not purport to reflect
what the actual results of operations or financial condition of the combined
company would have been had the Mergers been consummated on the dates assumed
for purposes of such pro forma financial statements or to be indicative of the
financial condition or results of operations of the combined company as of or
for any future date or period. For further information, see Exhibit 99.3. The
information in Exhibits 99.1 and 99.2 was provided by VEREIT and VEREIT OP.
Supplemental Risk Factors
The Company is also filing this Current Report on Form 8-K to provide certain
supplemental risk factors (the "Supplemental Risk Factors") that were originally
reflected in the Registration Statement on Form S-4 filed with the SEC by the
Company on June 4, 2021 (which Registration Statement is not incorporated by
reference in or a part of this Current Report on Form 8-K). The Supplemental
Risk Factors are attached hereto as Exhibit 99.4 and incorporated herein by
reference.
Forward-Looking Statements
This Current Report on Form 8-K may include "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act. All statements
other than statements of historical fact are "forward-looking statements" for
purposes of federal and state securities laws. These forward-looking statements,
which are based on current expectations, estimates and projections about the
industry and markets in which Realty Income and VEREIT operate and beliefs of
and assumptions made by Realty Income management and VEREIT management, involve
uncertainties that could significantly affect the financial condition or
operating results of Realty Income, VEREIT, the combined company that will be
formed by the Mergers, if consummated, or any company spun-off by the combined
company. Words such as "expects," "anticipates," "intends," "plans," "believes,"
"seeks," "estimates," "will," and variations of such words and similar
expressions are intended to identify such forward-looking statements. Such
forward-looking statements include, but are not limited to, statements about the
benefits of the proposed transactions involving Realty Income and VEREIT,
including future financial condition and operating results, plans, objectives,
expectations and intentions. All statements that address operating performance,
events or developments that we expect or anticipate will occur in the future -
including statements relating to creating value for stockholders, benefits of
the proposed transactions to clients, employees, stockholders and other
constituents of the combined company, integrating our companies, cost savings
and the expected timetable for completing the proposed transactions - are
forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions that are
difficult to predict. Although we believe the expectations reflected in any
forward-looking statements are based on reasonable assumptions, we can give no
assurance that our expectations will be attained and, therefore, actual outcomes
and results may differ materially from what is expressed or forecasted in such
forward-looking statements. For example, these forward-looking statements could
be affected by factors including, without limitation, risks associated with the
ability to consummate the proposed Mergers and the timing of the closing of the
proposed Mergers; the ability to secure favorable interest rates on any
borrowings incurred in connection with the proposed transactions; the impact of
indebtedness incurred in connection with the proposed transactions; the ability
to successfully integrate our operations and employees with those of VEREIT; the
ability to realize anticipated benefits and synergies of the proposed
transactions as rapidly or to the extent anticipated by financial analysts or
investors; potential liability for a failure to meet regulatory or tax-related
requirements, including the maintenance of REIT status; material changes in the
dividend rates on securities or the ability to pay dividends on common shares or
other securities; potential changes to tax legislation; changes in demand for
developed properties; adverse changes in the financial condition of joint
venture partner(s) or major tenants; risks associated with the acquisition,
development, expansion, leasing and management of properties; risks associated
with the ability to consummate the proposed spin-off of a planned company that
is to hold the office property assets of the Company and VEREIT ("SpinCo") and
the terms thereof, and the timing of the closing of the proposed spin-off; risks
associated with the ability to consummate any sales of office property assets of
the Company and VEREIT and the impact of such sales on SpinCo or the combined
company; failure to obtain debt financing to capitalize SpinCo; risks associated
with the geographic concentration of the Company, VEREIT or SpinCo; risks
associated with the industry concentration of tenants; the potential impact of
announcement of the proposed transactions or consummation of the proposed
transactions on business relationships, including with clients, employees,
customers and competitors; unfavorable outcomes of any legal proceedings that
have been or may be instituted against Realty Income, VEREIT or any company
spun-off by the combined company; costs related to uninsured losses,
condemnation, or environmental issues; the ability to retain key personnel;
costs, fees, expenses and charges related to the proposed transactions and the
actual terms of the financings that may be obtained in connection with the
proposed transactions; changes in local, national and international financial
markets, insurance rates and interest rates; general adverse economic and local
real estate conditions; the inability of major tenants to continue paying their
rent obligations due to bankruptcy, insolvency or a general downturn in their
business; foreign currency exchange rates; increases in operating costs and real
estate taxes; changes in dividend policy or ability to pay dividends for the
Company's or VEREIT's common stock or preferred stock; impairment charges;
unanticipated changes in the Company's or VEREIT's intention or ability to
prepay certain debt prior to maturity and/or hold certain securities until
maturity; pandemics or other health crises, such as coronavirus (COVID-19); and
those additional risks and factors discussed in reports filed with the U.S.
Securities and Exchange Commission ("SEC") by Realty Income. Moreover, other
risks and uncertainties of which Realty Income or VEREIT are not currently aware
may also affect these forward-looking statements and may cause actual results
and the timing of events to differ materially from those anticipated. The
forward-looking statements made in this communication are made only as of the
date hereof or as of the dates indicated in the forward-looking statements. The
Company undertakes no obligation to update or supplement any forward-looking
statements to reflect actual results, new information, future events, changes in
its expectations or other circumstances that exist after the date as of which
the forward-looking statements were made.
This communication does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval. In
connection with the proposed Mergers, Realty Income and VEREIT have filed with
the SEC a registration statement on Form S-4 containing a joint proxy
statement/prospectus and other documents regarding the proposed Mergers. The
joint proxy statement/prospectus is not a part of or incorporated by reference
in this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses to be Acquired
The audited consolidated financial statements of VEREIT and VEREIT OP as of
December 31, 2020 and 2019 and for each of the years in the three year period
ended December 31, 2020 are filed herewith as Exhibit 99.1 and incorporated in
this Item 9.01(a) by reference.
The unaudited consolidated financial statements of VEREIT and VEREIT OP as of
March 31, 2021 and for the three month periods ended March 31, 2021 and 2020 are
filed herewith as Exhibit 99.2 and incorporated in this Item 9.01(a) by
reference.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial statements of the Company
as and for the three month period ended March 31, 2021 and for the year ended
December 31, 2020, giving effect to the Mergers, are filed herewith as
Exhibit 99.3 and incorporated in this Item 9.01(b) by reference.
(d) Exhibits.
Exhibit No Description
23.1 Consent of Deloitte & Touche LLP for VEREIT, Inc.
23.2 Consent of Deloitte & Touche LLP for VEREIT Operating Partnership,
L.P.
99.1 Audited consolidated financial statements of VEREIT, Inc. and VEREIT
Operating Partnership, L.P. as of December 31, 2020 and 2019, and for
each of the years in the three year period ended December 31, 2020.
99.2 Unaudited consolidated financial statements of VEREIT, Inc. and
VEREIT Operating Partnership, L.P. as of March 31, 2021 and for the
three month periods ended March 31, 2021 and 2020.
99.3 Unaudited pro forma condensed combined financial statements of the
Company as of and for the three month period ended March 31, 2021 and
for the year ended December 31, 2020.
99.4 Supplemental Risk Factors.
104 Cover Page Interactive Data File (formatted as inline XBRL and
contained in Exhibit 101).
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