- GIC and Dream Industrial REIT to acquire Summit Industrial Income REIT in an all-cash transaction
- Summit unitholders to receive cash consideration of $23.50 per unit by way of a special distribution and a redemption of units
- After receiving the unanimous recommendation of the special committee of the Board of Trustees of Summit, composed of independent trustees, the Board of Trustees of Summit has unanimously determined that the transaction is in the best interest of the REIT and REIT unitholders, is fair to REIT unitholders, and is unanimously recommending that unitholders vote in favour of the transaction
- The trustees and executive officers of the REIT, who as of the date hereof collectively hold approximately 6.9% of the issued and outstanding units, have entered into voting and support agreements to vote in favour of the transaction
SINGAPORE/TORONTO – Summit Industrial Income REIT (“Summit” or the “REIT”) (TSX: SMU.UN), GIC and Dream Industrial REIT (“DIR”) (TSX: DIR.UN) today announced that they have entered into an agreement (the “Arrangement Agreement”) under which a joint venture (the “Joint Venture”) between GIC and DIR will acquire Summit in an all-cash transaction valued at approximately C$5.9 billion, including the assumption of certain debt (the “Transaction”).
Under the terms of the Arrangement Agreement, Summit unitholders will receive $23.50 per unit in cash by way of a special distribution and a redemption of units, which represents a premium of 31.1% to Summit’s closing unit price on November 4, 2022, a premium of 33.4% to the REIT’s 20-day volume weighted average price through November 4, 2022, and a 19.5% premium to Summit’s current equity research consensus Net Asset Value estimate of $19.66 per unit.
“We are pleased to provide an immediate and certain premium value to our unitholders through this all-cash transaction with GIC and Dream,” said Paul Dykeman, Chief Executive Officer and Trustee of Summit. “The entire Board of Trustees and management team are proud to have executed on our strategy to develop and aggregate an attractive, diversified portfolio with a team that is dedicated to delivering best-in-class services to our tenants, and this value optimization transaction represents a successful culmination of these efforts. We are confident this transaction is in the best interest of the REIT and unitholders.”
“We are pleased to bring GIC’s expertise in real estate investing together with Dream’s 25 years of experience as a world-class real estate developer, owner and asset manager. Through our partnership, Summit’s assets will be positioned for continued success,” said Lee Kok Sun, Chief Investment Officer of Real Estate, GIC.
“Summit has a premier portfolio of industrial properties defined by strong sector fundamentals, resilient cash flows, and stable market rent growth in key markets across Canada,” said Adam Gallistel, Head of Americas Real Estate, GIC. “This is another strong addition to GIC’s global real estate portfolio.”
“We have been impressed by Summit and their continued strong execution and we are thrilled to welcome an exceptional team to Dream,” said Michael Cooper, Founder, Dream Group of Companies, and Trustee, Dream Industrial REIT. “Summit’s business fits perfectly with Dream’s experience and management expertise, and we look forward to partnering with GIC.”
Summit will release financial results for its third quarter ended September 30, 2022, on November 9, 2022, but, as a result of today’s announcement, Summit will not host a conference call and webcast to discuss financial results and operations for the third quarter.
Transaction Details
The Transaction, expected to close in the first quarter of 2023, is subject to customary conditions, including Summit unitholder, court, and regulatory approvals, and will occur via a plan of arrangement under the Canada Business Corporations Act, pursuant to which the Joint Venture will acquire all of the assets and assume all of the liabilities of the REIT and Summit will pay a special distribution and redeem all of its units for $23.50 per unit in cash. The Arrangement Agreement contains customary terms and conditions, including deal protections. Summit unitholders of record as of October 31, 2022 will receive the previously declared monthly distribution for October that will be paid on November 15, 2022, following which Summit has agreed to suspend its monthly distribution through closing.
The foregoing summary is qualified in its entirety by the provisions of the Arrangement Agreement, a copy of which will be filed under the REIT’s profile on SEDAR at www.sedar.com. The REIT expects to hold a special meeting of unitholders to consider and vote on the Transaction in mid-December 2022. The REIT will mail a management information circular and certain related documents to unitholders in connection with such meeting, copies of which will be filed on SEDAR at www.sedar.com.
