Apple REITs to merge in $1.3-billion deal

Paperwork

The boards of directors for both Apple Hospitality REIT and Apple REIT Ten approved a definitive agreement to be merged as part of a cash and stock deal.

The transaction value for the deal is implied to be $1.3 billion, and is comprised of roughly $94 million in cash as well as 49.1 million Apple Hospitality shares issued to Apple Ten shareholders and the extinguishment or assumption of approximately $239 million in debt.

The terms of the deal stipulate that Apple Ten shareholders will receive $1.00 in cash per Apple Ten "Unit" and each Unit of Apple Ten would then be converted into a fixed exchange ratio of 0.522 Apple Hospitality common shares, equating to an implied price of $11.17 per Apple Ten Unit.

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the combined company will have an enterprise value of roughly $5.7 billion, and a total equity market capitalization of approximately $4.4 billion.

After the merger is complete, the combined entity will retain the Apple Hospitality REIT name, and Apple Hospitality's management team will retain their roles in the company. The closing date for the transaction is expected to take place in Q3 2016.

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