Agellan Commercial REIT to be acquired by Elad Group

February 19, 2019

Torys represented Agellan Commercial REIT with a team that included Kevin Morris, Josh Lavine, Brett Saulnier, Isabella Ssozi and Michael Zackheim (corporate/M&A), Andrew Wong and Michael Steele (tax), Andrew Gray (litigation) and Andy Gibbons (real estate).

On November 14, 2018, Agellan Commercial Real Estate Investment Trust (the “REIT”) announced that it entered into an arrangement agreement pursuant to which Elad Genesis Limited Partnership (“El-Ad”), an affiliate of El-Ad Group, Ltd., agreed to acquire all of the outstanding trust units of the REIT, other than those units already owned by El-Ad or its affiliates, for C$14.25 in cash per unit, valuing the REIT at approximately C$680 million (including the REIT’s net debt).

The transaction was structured as a statutory plan of arrangement under the Business Corporations Act (Ontario) and the Trustee Act (Ontario). The arrangement provided for, among other things, customary representations, warranties and covenants, including customary non-solicitation covenants from the REIT and a “fiduciary out” that would allow the Board to accept a superior proposal in certain circumstances, subject to a “right to match” in favour of El-Ad and payment by the REIT of a C$16 million termination fee to El-Ad.

The board of trustees of the REIT, after receiving financial and legal advice and following receipt of the fairness opinions of RBC Capital Markets and Wells Fargo Securities and the unanimous recommendation of the special committee of the Board comprised of independent trustees, unanimously approved the transaction and recommended that unitholders vote in favour of the transaction at a special meeting of unitholders held in January 2019.

The Ontario Superior Court of Justice (Commercial List) approved the plan of arrangement on January 14, 2019 and the transaction closed on February 19, 2019.

Agellan Commercial REIT is an unincorporated, open-ended real estate investment trust established for the purpose of acquiring and owning industrial, office and retail properties in select target markets in the United States and Canada. The REIT’s 46 properties contain 8.3 million square feet of gross leasable area, with the REIT’s ownership interest at 7.0 million square feet.

Further information can be found on Business Wire’s website.

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