By Lisa Kerner
Charlotte, N.C., May 22 - The boards of directors of Grubb & Ellis Co. and NNN Realty Advisors, Inc. approved the merger of the two companies to create a real estate services company with a total capitalization of approximately $725 million.
The company will retain the Grubb & Ellis name and will continue to be listed on the New York Stock Exchange under the ticker symbol "GBE."
Under the merger agreement, 0.88 shares of Grubb & Ellis common stock will be issued for each share of NNN Realty Advisors common stock outstanding.
The transaction is expected to close in the third or fourth quarter. Following the closing, Grubb & Ellis expects to begin paying an annual dividend of $0.41 per share.
Grubb & Ellis stockholders will own approximately 41% of the combined company and NNN Realty Advisors stockholders will own approximately 59% of the combined company.
"The stock for stock transaction offers significant benefits to stockholders of both companies by combining two industry leaders in their respective segments of the commercial real estate industry," Grubb & Ellis chairman C. Michael Kojaian said in a company news release.
"We believe that the combination of the two companies will be accretive in the first full year of operations subsequent to closing and will generate significant cash flow to fuel long term growth."
Scott D. Peters, chief executive officer and president of NNN Realty Advisors will become chief executive officer of the newly combined company.
NNN Realty Advisors is a privately held real estate company located in Santa Ana, Calif.
Grubb & Ellis is a Chicago-based commercial real estate company.
| Acquirer: | Grubb & Ellis Co.
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| Target: | NNN Realty Advisors, Inc.
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| Price per share: | 0.88 shares of Grubb & Ellis common stock for each share of NNN Realty Advisor common stock outstanding
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| Announcement date: | May 22
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| Expected closing: | Third or fourth quarter
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| Stock price for acquirer: | NYSE: GBE: $10.76 on May 21
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