TORONTO, ONTARIO--(Marketwired - Aug. 25, 2016) -
NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES
Automotive Properties Real Estate Investment Trust (TSX:APR.UN) ("Automotive Properties REIT" or the "REIT") announced today that it has entered into an agreement to sell 3,340,000 units of the REIT (the "Units") on a bought deal basis at a price $10.50 per Unit (the "Offering Price") to a syndicate of underwriters co-led by TD Securities Inc. and Canaccord Genuity Corp. for gross proceeds of approximately $35 million (the "Offering").
In addition, the REIT has granted the syndicate of underwriters an over-allotment option, exercisable in whole or in part at any one time up to 30 days following closing of the Offering, to purchase up to an additional 501,000 Units at the Offering Price which, if exercised in full, would increase the gross proceeds of the Offering to approximately $40 million.
893353 Alberta Inc. ("Dilawri") has waived its pre-emptive right in connection with the Offering.
Closing of the Offering is expected to occur on or about September 19, 2016, and is subject to certain customary conditions, including approval of the Toronto Stock Exchange.
The REIT intends to use the net proceeds from the Offering to finance the $17.2 million purchase price for the previously-announced acquisition of the Pfaff Audi dealership property, located in Vaughan, Ontario (the "Acquisition"). The Acquisition is expected to close by early October 2016. The balance of the net proceeds from the Offering will be used to repay indebtedness and for general business purposes. The previously-announced new $14.6 million revolving credit facility with a major Canadian chartered bank will not be used to finance the Acquisition and is expected to be undrawn at the closing of the Offering.
Assuming successful completion of the Offering and the Acquisition and the repayment of approximately $15.5 million of the REIT's outstanding indebtedness from the proceeds of the Offering, the REIT expects its pro forma debt to gross book value at June 30, 2016 to be approximately 50% (compared to 55.6% at June 30, 2016). Approximately $15 million of the indebtedness expected to be repaid was incurred by the REIT to fund its three previously announced acquisitions.
In addition to the Acquisition, the REIT is in various stages of negotiations and due diligence in respect of other potential acquisitions, including under the Strategic Alliance Agreement with Dilawri. There can be no assurance that these negotiations will result in acquisitions or, if they do, what the final terms or timing of such acquisitions would be.
The Units will be offered by way of a short form prospectus to be filed on or about September 12, 2016 with the securities commissions and other similar regulatory authorities in each of the provinces of Canada.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Automotive Properties REIT
Automotive Properties REIT is an unincorporated, open-ended real estate investment trust focused on owning and acquiring primarily income-producing automotive dealership properties located in Canada. The REIT's portfolio of 29 income producing commercial properties represents approximately 1.1 million square feet of gross leasable area in Ontario, Saskatchewan, Alberta, British Columbia and Québec. Automotive Properties REIT is the only public vehicle in Canada focused on consolidating automotive dealership real estate properties. For more information, please visit: www.automotivepropertiesreit.ca.
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the REIT's current expectations regarding future events and in some cases can be identified by such terms as "will" and "expected". Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risks and Uncertainties" in the REIT's management's discussion and analysis for the period ended December 31, 2015 and in the REIT's current annual information form, both of which are available on SEDAR (www.sedar.com). The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks as of the date of this news release.
Non-IFRS Financial Measures
This news release contains a financial measure which is not defined under International Financial Reporting Standards ("IFRS") and may not be comparable to similar measures presented by other real estate investment trusts or enterprises. Debt to gross book value is a measure of financial position defined by the REIT's declaration of trust and refers to the ratio of the REIT's consolidated indebtedness to gross book value of the REIT's assets at a particular time. This measure is not defined by IFRS and does not have a standardized meaning prescribed by IFRS. Please refer to the REIT's management's discussion and analysis for further discussion of this non-IFRS financial measure.