GIC, Centerbridge Clinch $868M Buyout of US Industrial REIT After Sweetening Deal

Singapore’s GIC and US private equity firm Centerbridge Partners have agreed to take NASDAQ-listed INDUS Realty Trust private in a sweetened deal that values the American industrial REIT at $868 million.

Indus has entered into a definitive merger agreement under which GIC and Centerbridge will acquire all of its outstanding shares for $67 cash each to take over the REIT, which has a portfolio of 42 logistics and other industrial assets across five US states, the companies announced on Wednesday.

Under the updated terms, which have been unanimously approved by Indus’ board of directors, the GIC-Centerbridge offer was raised 3 percent from the initial take-private bid of $65 per share, which the partners made last November. With Centerbridge owning nearly 15 percent of the REIT pre-offer, the bid last year had represented an approximate consideration of $662.5 million.

“After conducting an extensive process to explore the company’s strategic alternatives, we are pleased to have reached an agreement with Centerbridge and GIC,” said Michael Gamzon, president and chief executive officer of the REIT. “The transaction delivers immediate and significant value to our stockholders, and we believe it validates the quality of the platform and portfolio we have built over Indus’ long history.”

Stock Climbs

The final purchase price represents a 17 percent premium to the REIT’s unaffected value of $57.28 per share on 25 November or before buyout bid was announced, and is 26 percent higher than the security’s volume-weighted average price during the 30 days before the offer was made.

Investors reacted positively to news of the deal with shares in Indus jumping by 5.2 percent to close at $66.17 each on Wednesday, from $62.91 prior to the latest announcement. The trust’s market cap stood at $674 million as of Thursday.

Indus, formerly known as Griffin Industrial Realty, develops, acquires, operates and leases industrial and logistics properties in the US. It is a successor to tobacco giant Culbro Corporation, which was co-founded by the late cigar baron Edgar M Cullman Sr.

The REIT’s 42-asset portfolio spans 6.1 million square feet (566,709 square metres) of floor area across Connecticut, Pennsylvania, North Carolina, South Carolina, and Florida.

GIC and Centerbridge have already secured equity commitments worth a combined $976 million from their affiliated entities to fund the acquisition, according to the merger agreement. Indus expects the deal to close within three months or before May 23, pending approval from stockholders and regulators.

“I would like to extend my thanks to the entire board and management team for their hard work during this process, and for their unwavering commitment to act in the best interests of our stockholders,” added Gamzon.

Morgan Stanley served as sole financial advisor and Latham & Watkins as legal counsel for Indus, while GIC and Centerbridge had BofA Securities and JP Morgan Securities as financial advisors.

GIC and Centerbridge had yet to comment on this latest agreement by the time of publication.

GIC Bets Big on US REITs

With the deal on the way to being finalised, Indus has now become the latest in a string of REITs bought out by GIC and partners over the past year, as the Singapore giant looks set to retain its title as the world’s most active sovereign wealth fund.

In November, GIC teamed up with Canada’s Dream Industrial REIT in buying out Toronto-listed Summit Industrial Income REIT for C$5.9 billion (then $4.37 billion) in cash. That deal gave the pair ownership of a portfolio of 160 warehouses spanning 21.59 million square feet across four provinces in Canada.

That transaction came just two months after GIC, together with Oak Street – a real estate private equity division of New York-based asset manager Blue Owl Capital – inked a take-private deal for NYSE-listed Store Capital and its portfolio of 3,012 single-tenant commercial and industrial properties across the US.

Completed earlier this month, the $14 billion buyout deal gave GIC and Oak Street ownership of the only REIT which had been invested by investment superstar Warren Buffett’s Berkshire Hathaway boss Warren Buffett has invested in.

GIC closed 73 deals last year representing a total investment of $40.3 billion. Half of that total was deployed in real estate with logistics being the fund’s most favoured market segment as it raises its total commitments by 17 percent compared to 2021, according to industry watcher Global SWF.