Plymouth Industrial will transition from a public to a private company following an agreement with Makarora Management and Ares Alternative Credit. The firms have arranged to acquire all outstanding shares of the Boston-based real estate investment trust (REIT) for $22 per share, according to Plymouth’s announcement. The transaction, which is entirely in cash, values Plymouth at $2.1 billion, including its outstanding debt.
Earlier this year, Sixth Street Partners made an unsolicited bid for Plymouth in August. However, the current deal with Makarora and Ares nearly doubles the valuation offered by Sixth Street.
Chad Pike, founder of Makarora, stated: “The properties are well positioned to capitalize on strong industrial demand from these major population centers,” referring to the Midwest and East Coast locations that are within a day’s drive of most of the U.S. population.
The merger has received approval from Plymouth’s board of directors but still requires shareholder consent. If approved, the deal is expected to close early next year.
Plymouth will also begin a 30-day “go-shop” period during which it can solicit and review other acquisition proposals. The company plans to pay its third-quarter dividend soon but does not intend to issue an earnings release for that quarter.
Plymouth owns 226 buildings across 10 markets, totaling more than 32 million square feet.
Last year, Plymouth formed a partnership with Sixth Street involving over $250 million focused on properties in the Chicago area. As part of that arrangement, Sixth Street invested $116 million for a 65 percent stake in 34 Chicago-area properties covering 5.9 million square feet. This portfolio was valued at $356 million after accounting for $178 million in mortgages on those assets.
Makarora was founded last year by Chad Pike, who previously worked as an executive at Blackstone.
