Liberty Property Trust To Buy Cabot Fund Partnership

(RTTNews) - Liberty Property Trust (LRY) said Wednesday that it has agreed to buy the operating partnership of Cabot Industrial Value Fund III for a purchase price of $1.475 billion.

Including related net transaction expenses and anticipated capital expenditures, the total costs are expected to be about $1.5 billion.

The deal is expected to close in October.

When completed, the deal will increase Liberty's industrial platform by about 23 million square feet and will add 177 properties in 24 new and existing Liberty industrial markets.

The purchase price consists of the assumption of about $230 million of outstanding mortgage debt with a weighted average maturity of seven years with the remainder payable in cash. In concert with the deal, Liberty has received a commitment for a $1.27 billion senior unsecured bridge loan.

Liberty plans to permanently finance the deal with a combination of debt and equity financing. Liberty also plans to dispose of certain operating properties that are expected to generate about $150 million of additional proceeds.

Separately, Liberty said that it plans to sell 21 million newly issued common shares in an underwritten public offering. The company expects to grant the underwriters a 30-day option to purchase up to an additional 3.15 million common shares.

Liberty expects to use the net proceeds from the offering to fund a portion of the purchase price for the acquisition of the operating partnership of Cabot Industrial Value Fund III.

The closing of the offering is not conditioned upon the consummation of the acquisition. If the acquisition is not consummated, Liberty plans to use the net proceeds from the offering for working capital and general corporate purposes, including to repay borrowings under Liberty's credit facility.