- Agree Realty Corporation (ADC, Financial) initiates public offering of 4.5 million common shares, potentially increasing to 5.175 million shares.
- Proceeds aimed at funding property acquisitions, development activities, and debt reduction.
- Incorporates forward sale agreement with Bank of America, deferring share issuance and dilution.
Agree Realty Corporation (ADC) has announced a public offering of 4,500,000 shares of its common stock, with the possibility of expanding this to 5,175,000 shares if the underwriter's 30-day option is fully exercised. This offering represents approximately 4.3% to 4.9% additional shares based on the company's current market cap of $8.3 billion.
The strategic element of this offering is the utilization of a forward sale agreement with Bank of America. Under this agreement, Bank of America will borrow and sell shares to underwriters, allowing ADC to set the share price at the time of the offering while deferring the actual issuance and receipt of proceeds until required for the company's funding needs.
While Agree Realty will not receive immediate proceeds from this offering, it intends to use the future net proceeds for general corporate purposes. These include property acquisitions, development activities, and repayment of outstanding debts under its revolving credit facility. This approach aligns with ADC’s business strategy as a net lease REIT focused on growth through property acquisition while considering shareholder dilution timing.
BofA Securities is acting as the sole book-running manager for this offering, facilitating an efficient execution process. The offering is being made via an effective shelf registration statement filed with the U.S. Securities and Exchange Commission (SEC).
