Monmouth Real Estate Investment Corp. (MNR) has agreed to be acquired by Industrial Logistics Properties Trust (ILPT) in an all-cash transaction valued at around $4.0 billion, notes income expert Bryan Perry, editor of Cash Machine.

Under the terms of the transaction, Industrial Logistics will pay $21.00 for each share of MNR. The transaction, which is expected to close in H1 2022, isn't contingent upon financing. For Industrial Logistics, the transaction gives it 126 new, class A single-tenant, net-leased e-commerce focused industrial properties across 32 states.

The acquisition is expected to be immediately accretive to ILPT's normalized funds from operations (FFO) per share. To finance the deal, Industrial Logistics expects to form a joint venture with one or more institutional investors for equity investments of $430 million to $1.3 billion.

As such, ILPT doesn't plan to issue common shares to finance the acquisition. It plans to fund the rest of the purchase with proceeds from new mortgage debt and, depending on the eventual size of the joint venture investments, Industrial Logistics may also sell up to $1.6 billion of Monmouth Real Estate properties to finance the rest of the transaction.

Industrial Logistics has already received commitments from lenders for a $4.0 billion bridge loan facility. Shares of ILPT have pulled back from $28.60 to $24.60 on the news, and presents, in my view, an excellent entry point to initiate and add to positions. Buy ILPT under $28.

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