Blackstone REIT to acquire WPT Industrial REIT for $3.1bn

WPT Industrial Real Estate Investment Trust, a Toronto-based real estate investment platform that acquires, develops and operates distribution and logistics properties, has agreed to be acquired by Blackstone Real Estate Income Trust.

WPT Industrial Real Estate Investment Trust, a Toronto-based real estate investment platform that acquires, develops and operates distribution and logistics properties, has agreed to be acquired by Blackstone Real Estate Income Trust. The all-cash deal is valued at $3.1 billion, including the assumption of debt. It is expected to close in the fourth quarter.

PRESS RELEASE

TORONTO and NEW YORK, Aug. 09, 2021 (GLOBE NEWSWIRE) — WPT Industrial Real Estate Investment Trust (TSX: WIR.U; WIR.UN) (OTCQX: WPTIF) (“WPT”) and Blackstone Real Estate Income Trust, Inc. (“BREIT”) announced today that WPT has entered into an arrangement agreement (the “Arrangement Agreement”) under which BREIT will acquire all of the outstanding units of WPT (each, a “Unit”) through a series of transactions that will result in unitholders receiving US$22.00 per Unit in an all-cash transaction valued at US$3.1 billion including the assumption of debt (the “Transaction”).

The Transaction price of US$22.00 per Unit represents a 17.1% premium to the closing price of the Units on the TSX on August 6, 2021, the last trading day prior to the announcement of the Transaction, a 19.5% premium to WPTs 30-day volume-weighted average Unit price on the TSX for the period ending August 6, 2021 and a 32.1% premium to the current research consensus Net Asset Value per Unit estimate for WPT of US$16.66 per Unit.

After receiving the unanimous recommendation of a committee of independent members of the Board of Trustees of WPT (the “Special Committee”) and in consultation with its financial and legal advisors, the Board of Trustees of WPT has unanimously determined that the Transaction is in the best interests of WPT and WPT unitholders and fair to WPT unitholders, and is unanimously recommending that WPT unitholders vote in favour of the Transaction. The Transaction is expected to close in the fourth quarter of 2021.

“We are very proud to enter into a transaction that delivers unitholders a compelling premium to Net Asset Value per Unit and our all-time high Unit price. Blackstone’s interest in acquiring and investing in the WPT platform is a testament to the quality of our portfolio and capabilities of our team” said Scott Frederiksen, Chief Executive Officer of WPT.

“Blackstone is one of the world’s most active investors in logistics real estate and we are very pleased to enter into a transaction with such a highly reputable counterparty that delivers immediate value for WPT unitholders,” added Louie DiNunzio, Chair of the Special Committee.

David Levine, Senior Managing Director at Blackstone said: “Logistics remains one of our highest conviction themes as the sector continues to benefit from strong tailwinds driven by e-commerce. We look forward to expanding our logistics presence across key U.S. markets with the acquisition of this high-quality portfolio that WPT has built.”

WPT will release financial results for its second quarter ended June 30, 2021 on August 11, 2021, but, as a result of today’s announcement, the company will not host a conference call and webcast to discuss financial results and operations for the second quarter.

Transaction Details
The Transaction is structured as a statutory plan of arrangement under the Business Corporations Act (British Columbia). Completion of the Transaction is subject to customary conditions, including approval of at least 66 2/3% of the votes cast by WPT unitholders at a special meeting of WPT unitholders, approval of at least a majority of the votes cast by WPT unitholders, excluding votes held by certain unitholders who also hold Class B units of a subsidiary of WPT at such meeting and court approval.

As part of the Transaction, WPT has agreed that distributions for the months of August 2021, September 2021, October 2021 and the first half of November 2021 will be suspended. If the Transaction has not closed by November 15, 2021, WPT intends to reinstate the monthly distribution for periods commencing November 16, 2021 and to pay a distribution in respect of November pro rated for the number of days following November 15, 2021 up to the date prior to closing or to the end of the month in the event closing does not occur in November and for subsequent months pro rated for the number of days in the month up to the date prior to closing.

The Arrangement Agreement provides for, among other things, customary representations, warranties and covenants, including customary non-solicitation covenants from WPT, subject to the ability of the Board of Trustees of WPT to negotiate and accept a superior proposal in certain circumstances, with a “right to match” in favour of BREIT, and conditioned upon payment of a US$73.8 million termination fee to BREIT. In certain circumstances, BREIT is required to pay a US$236.1 million break fee to WPT upon the termination of the Arrangement Agreement.

The foregoing summary is qualified in its entirety by the Arrangement Agreement, a copy of which will be filed on SEDAR at www.sedar.com. WPT expects to hold a special meeting of unitholders to consider and vote on the Transaction in early October 2021. WPT will mail a management information circular and certain related documents to WPT unitholders in connection with such meeting, copies of which will be filed on SEDAR at www.sedar.com.

Advisors
Morgan Stanley & Co. LLC and Desjardins Capital Markets are acting as financial advisors to WPT and Blair Franklin Capital Partners Inc. has also provided the Special Committee with a fairness opinion in respect of the Transaction.
Blake, Cassels & Graydon LLP and Vinson & Elkins LLP are acting as legal counsel to WPT in connection with the Transaction and Wildeboer Dellece is acting as independent legal counsel to the Special Committee.

Eastdil Secured is acting as financial advisor to BREIT and Simpson Thacher & Bartlett LLP and Goodmans LLP are acting as legal counsel to BREIT.

About WPT Industrial Real Estate Investment Trust
WPT Industrial Real Estate Investment Trust is an unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. WPT acquires, develops, manages and owns distribution and logistics properties located in the United States. WPT Industrial, LP (WPT’s operating subsidiary) indirectly owns or manages a portfolio of properties across 19 U.S. states consisting of approximately 37.5 million square feet of GLA and 109 properties.

About Blackstone Real Estate Income Trust
Blackstone Real Estate Income Trust, Inc. (BREIT) is a perpetual-life, institutional quality real estate investment platform that brings private real estate to income focused investors. BREIT invests primarily in stabilized, income-generating U.S. commercial real estate across key property types and to a lesser extent in real estate debt investments. BREIT is externally managed by a subsidiary of Blackstone (NYSE: BX), a global leader in real estate investing. Blackstone’s real estate business was founded in 1991 and has approximately $208 billion in investor capital under management. Further information is available at www.breit.com.