PRINCETON, N.J.–(BUSINESS WIRE)–Essential Properties Realty Trust, Inc. (NYSE: EPRT) announced today the pricing of an underwritten public offering of 9,000,000 shares of its common stock, all of which are being offered in connection with the forward sale agreements described below, at a public offering price of $24.75 per share. The offering was upsized from the previously announced offering size of 8,000,000 shares of common stock, and the offering is expected to close on March 14, 2024, subject to customary closing conditions.
BofA Securities, Wells Fargo Securities, Truist Securities and Mizuho are acting as the joint book-running managers for the offering. BMO Capital Markets, TD Securities, Barclays, Capital One Securities, Citigroup and Goldman Sachs & Co. LLC are acting as the book-running managers of the offering. Stifel, Raymond James, Wolfe Capital Markets and Advisory, Scotiabank, BNP PARIBAS and Huntington Capital Markets are acting as co-managers of the offering.
In connection with the offering, the Company entered into forward sale agreements with BofA Securities, Wells Fargo Securities, Truist Securities and Mizuho (or affiliates thereof) (the “forward purchasers”), with respect to 9,000,000 shares of the Company’s common stock.
The underwriters have been granted a 30-day option, exercisable in whole or in part from time to time, to purchase up to an additional 1,350,000 shares of the Company’s common stock. If the option to purchase additional shares of the Company’s common stock is exercised, the Company expects to enter into one or more additional forward sale agreements with the forward purchasers in respect of the number of shares of the Company’s common stock that are subject to exercise of the option to purchase additional shares.
In connection with the forward sale agreements and any additional forward sale agreements, the forward purchasers (or their affiliates) are expected to borrow from third parties and sell to the underwriters an aggregate of 9,000,000 shares of the Company’s common stock (or an aggregate of 10,350,000 shares of the Company’s common stock if the underwriters’ option to purchase additional shares is exercised in full). However, a forward purchaser (or its affiliate) is not required to borrow and sell such shares if, after using commercially reasonable efforts, such forward purchaser (or its affiliate) is unable to borrow such shares, or if borrowing costs exceed a specified threshold or if certain specified conditions have not been satisfied. If a forward purchaser (or its affiliate) does not deliver and sell all of the shares of the Company’s common stock to be sold by it to the underwriters, the Company will issue and sell to the underwriters a number of shares of its common stock equal to the number of shares that such forward purchaser (or its affiliate) did not deliver and sell, and the number of shares underlying the relevant forward sale agreement or such additional forward sale agreement will be decreased by the number of shares that the Company issues and sells.
Pursuant to the terms of the forward sale agreements and any additional forward sale agreements, and subject to its right to elect cash or net share settlement, the Company intends to issue and sell, upon physical settlement of the forward sale agreements and any additional forward sale agreements, an aggregate of 9,000,000 shares of common stock (or an aggregate of up to 10,350,000 shares of common stock if the underwriters’ option to purchase additional shares is exercised in full) to the forward purchasers. The Company expects to physically settle the forward sale agreements and any additional forward sale agreements within approximately 12 months from the date of the prospectus supplement relating to the offering.
The Company will not receive any proceeds from the sale of shares of its common stock by the forward purchasers (or affiliates thereof). The Company intends to contribute any net proceeds from the settlement of the forward sale agreements to the Company’s operating partnership in exchange for OP Units, and the operating partnership intends to use such net proceeds for general corporate purposes, including potential future investments.
About Essential Properties Realty Trust, Inc.
Essential Properties Realty Trust, Inc. is an internally managed REIT that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to companies operating service-oriented or experience-based businesses. As of December 31, 2023, the Company’s portfolio consisted of 1,873 freestanding net lease properties with a weighted average lease term of 14.0 years and a weighted average rent coverage ratio of 3.8x. In addition, as of December 31, 2023, the Company’s portfolio was 99.8% leased to 374 tenants operating 588 different concepts in 16 industries across 48 states.
