DENVER, and NEW YORK, Sept. 12,
2016 /PRNewswire/ -- Farmland Partners Inc. (NYSE: FPI)
("FPI") and American Farmland Company (NYSE MKT: AFCO) ("AFCO")
jointly announced today that they have entered into a definitive
agreement (the "Agreement") pursuant to which FPI has agreed to
acquire all of the outstanding common stock of AFCO in a
stock-for-stock transaction.
The combined company will be the largest public farmland REIT in
the nation spanning more than 133,000 acres across 16 states, along
both Coasts, the Midwest, the Plains and the Delta. The merger
brings together two highly complementary leading farmland
portfolios. FPI's assets are comprised primarily of premier row
crop farmland, while AFCO's portfolio is concentrated in
high-quality specialty and permanent crop farms across the U.S.
On a consolidated basis, the combined company's portfolio is
expected to consist of approximately 75% row crop farmland and 25%
specialty crops by value. FPI expects to consolidate AFCO's
operations into FPI's existing Denver-based headquarters and to realize
significant cost synergies through eliminating duplicate
administrative and other public company costs.
Paul A. Pittman will continue as
FPI's Chairman and CEO. D. Dixon
Boardman and Thomas S. T.
Gimbel, AFCO's Chairman and CEO, respectively, will join
FPI's Board of Directors.
Commenting on the merger, Paul
Pittman, FPI Chairman and CEO, said, "FPI's acquisition of
these great assets assembled by AFCO will strengthen FPI's role as
the leading public farmland real estate platform in the U.S. This
merger will significantly increase FPI's diversification across
crops and geographies. Thanks to increased scale, we also expect to
realize a reduction in overall costs as a percentage of portfolio
value, creating superior value for our and AFCO's stockholders and
our respective farmer partners."
Thomas S.T. Gimbel, AFCO's Chief
Executive Officer, commented, "We believe this opportunity to join
FPI's robust platform presents a meaningful opportunity to our
stockholders. As the end result of a thorough process we commenced
in April of this year, we are confident that the complementary
nature of this transaction will accomplish our goal of enhancing
stockholder value while preserving our core principles and
continuing to execute on our vision for a scalable institutional,
well-diversified and high-quality portfolio of farmland
assets."
Under the terms of the Agreement, each share of AFCO common
stock and each AFCO operating partnership unit will be converted
into the right to receive 0.7417 shares (or units) of newly issued
FPI common stock (or units). On a pro-forma fully diluted basis,
following the merger, former FPI equity holders will hold
approximately 65% of the combined company's equity, and former AFCO
equity holders will hold approximately 35%. The stock-for-stock
merger is intended to qualify as a tax-free reorganization. The
transaction is subject to customary closing conditions, including
receipt of the requisite approval of both FPI and AFCO
stockholders.
Both company's boards of directors have approved the transaction
and recommend the transaction for approval by their respective
stockholders. The parties currently expect the transaction to close
in the later part of this year or early during the first quarter of
2017.
Strategic Benefits
Upon consummation of the merger, FPI will significantly increase
its scale and improve the quality and diversification of its
portfolio while expanding its market presence in key farming
regions across the U.S., which is expected to result in strategic
and financial benefits for stockholders:
- Larger, More Diversified Portfolio of High-Quality
Assets: The combined company's portfolio is expected to be
comprised of institutional-quality farmland assets located in key
farming regions in 16 states around the U.S. along both Coasts, the
Midwest, the Plains and the Delta. The portfolio will also be
diversified by crop type, with approximately 75% of the portfolio
(by value) to be comprised of row crop farmland and approximately
25% of the portfolio to be comprised of specialty and permanent
crops.
- Increased Scale: The combined company is expected
to maximize operational efficiencies and lead to significant cost
savings resulting from consolidating overhead expenses into FPI's
existing operations. The increased scale of the combined
enterprise is also expected to provide an enhanced platform to
pursue accretive acquisitions in row, specialty and permanent crop
farmland across a wider geographic footprint.
- Reinforces FPI's Position as the Leading Farmland
REIT: The acquisition of AFCO further reinforces FPI's
position as the largest, most diversified and most liquid public
farmland REIT.
- Increased Revenues: On a pro-forma basis, the
transaction is expected to contribute approximately $16 million of revenue in 2016, increasing FPI's
total revenue from $26 million to
approximately $42 million.
- Transaction Accretion to both AFCO and FPI
Stockholders: The transaction is expected to be
approximately 10% accretive to FPI's AFFO per share in 2017 growing
to 20% accretive as synergies are fully realized.
- Greater Access to Capital: After giving effect to
the transaction, the combined company is expected to have a
fully-diluted market cap of approximately $400 million. The size and scale of the combined
company is expected to provide greater access to global investors
targeting investments in U.S. farmland assets.
Leadership
Paul A. Pittman, FPI's Chief
Executive Officer and Chairman of FPI's Board of Directors, will
serve as Chief Executive Officer and Chairman of the Board of
Directors of the combined company. Luca
Fabbri will remain CFO of the combined company.
Additionally, Robert L. Cowan is
expected to join FPI as President upon completion of the
transaction. Upon consummation of the transaction, the number of
directors comprising FPI's Board of Directors will be increased
from six to eight, of which two directors from AFCO, its Chairman
and its CEO, have been designated by AFCO from its existing Board
of Directors and will be elected to the FPI Board.
Advisors
Robert W. Baird & Co. acted as financial advisor and
Morrison & Foerster LLP and Venable LLP acted as legal advisors
to FPI. Citigroup Global Markets Inc. and Raymond James & Associates, Inc. acted as
financial advisors and Goodwin Procter LLP acted as legal advisors
to AFCO.
Conference Call and Webcast
The companies will host a joint conference call on Monday, September 12, 2016 at 10:30 am Eastern Time to discuss the proposed
transaction. The conference call-in number is (866) 262-6804
(Domestic); or (412) 902-4107 (International) or
interested parties can join the live webcast of the conference call
by accessing the Investor Relations section of each company's
website at ir.farmlandpartners.com or
at http://investors.americanfarmlandcompany.com. A replay
of the conference call will be available beginning September 12, 2016 at 1:00
p.m. (Eastern Time) until September
26, 2016 at 11:59 p.m. (Eastern
Time), by dialing (877) 344-7529 (U.S.) or (412) 317-0088
(International); passcode: 10092625. A replay of the webcast
will also be accessible on the FPI Investor Relations website for a
limited time following the event.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate
investment trust that owns and seeks to acquire high-quality North
American farmland and makes loans to farmers secured by farm real
estate. The Company's portfolio is comprised of 271 farms with an
aggregate of 115,308 acres (including four farms totaling 1,668
acres under contract) in Arkansas,
Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North
Carolina, South Carolina,
Texas and Virginia. The Company elected to be taxed as a
real estate investment trust, or REIT, for U.S. federal income tax
purposes, commencing with the taxable year ended December 31, 2014.
About American Farmland Company
American Farmland Company is an internally managed real estate
investment trust and a Maryland
corporation focused on owning and acquiring a diversified portfolio
of high-quality farmland, consisting of mature permanent,
specialty/vegetable row and commodity row crop farms, as well as
farmland development, located in select major agricultural regions
throughout the United States. As
of June 30, 2016, AFCO's portfolio
consisted of 22 farms located on both Coasts as well as in the Corn
Belt and the Delta regions covering approximately 18,322 gross
acres of farmland and more than 21 major crop types.
Cautionary Statement Regarding Forward-Looking
Statements
This communication includes forward-looking statements. These
forward-looking statements generally can be identified by phrases
such as "will," "expects," "anticipates," "foresees," "forecasts,"
"estimates" or other words or phrases of similar import. These
statements are based on current expectations, estimates and
projections about the industry, markets in which FPI and AFCO
operate, management's beliefs, assumptions made by management and
the transactions described in this communication. While the FPI's
and AFCO's management believes the assumptions underlying the
forward-looking statements and information are reasonable, such
information is necessarily subject to uncertainties and may involve
certain risks, many of which are difficult to predict and are
beyond management's control. These risks include, but are not
limited to: (1) the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; (2) the outcome of any legal proceedings that may be
instituted against the parties and others following announcement of
the merger agreement; (3) the inability to consummation the
transaction due to the failure to obtain the requisite stockholder
approvals or the failure to satisfy other conditions to completion
of the transaction; (4) risks that the proposed transaction
disrupts current plans and operations of FPI and AFCO; (5) the
ability to recognize the benefits of the transaction; and (6) the
amount of the costs, fees, expenses and charges related to the
transaction; and the other risks and important factors contained
and identified in FPI's and AFCO's filings with the Securities and
Exchange Committee ("SEC"), such as their respective Quarterly
Reports on Form 10-Q and Annual Reports on Form 10-K, any of which
could cause actual results to differ materially from the
forward-looking statements in this communication.
There can be no assurance that the transaction will in fact be
consummated. We caution investors not to unduly rely on any
forward-looking statements. The forward-looking statements speak
only as of the date of this communication. Neither FPI nor AFCO is
under any duty to update any of these forward-looking statements
after the date of this communication, nor to conform prior
statements to actual results or revised expectations, and neither
FPI nor AFCO intends to do so.
Important Information for Investors and Stockholders
In connection with the proposed transaction, FPI expects to file
with the SEC a registration statement on Form S-4 that will include
a joint proxy statement of FPI and AFCO that also constitutes a
prospectus of FPI, which joint proxy statement will be mailed or
otherwise disseminated to FPI's and AFCO's respective stockholders
when it becomes available. FPI and AFCO also plan to file other
relevant documents with the SEC regarding the proposed transaction.
INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS
AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC IF AND WHEN THEY
BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION.
Investors and security holders may obtain free copies of the
registration statement and the joint proxy statement/prospectus (if
and when it becomes available) and other relevant documents filed
by FPI and AFCO with the SEC at the SEC's website at www.sec.gov.
Copies of the documents filed by the companies will be available
free of charge on their websites at
www.farmlandpartners.com and
www.americanfarmlandcompany.com.
Participants in Solicitation
FPI, AFCO and their respective directors and executive officers
may be considered participants in the solicitation of proxies in
connection with the proposed transaction. Information about the
directors and executive officers of FPI is set forth in its Annual
Report on Form 10-K for the year ended December 31, 2015,
which was filed with the SEC on March 15,
2016, and its proxy statement for its 2016 annual meeting of
stockholders, which was filed with the SEC on April 14, 2016. Information about the directors
and executive officers of AFCO is set forth in its Annual Report on
Form 10-K for the year ended December 31, 2015, which was
filed with the SEC on March 30, 2016,
and its proxy statement for its 2016 annual meeting of
stockholders, which was filed with the SEC on April 28, 2016. These documents can be obtained
free of charge from the sources indicated above. Additional
information regarding the participants in the proxy solicitations
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the joint
proxy statement/prospectus and other relevant materials to be filed
with the SEC when they become available.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to sell or the solicitation of an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote of approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
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SOURCE Farmland Partners Inc.; American Farmland Company