How did Prologis finance this large acquisition?

The acquisition was financed through a combination of factors. Prologis assumed approximately $400 million in secured mortgage debt, issued 4.5 million common limited partnership units (OP Units) to KTR, and paid approximately $2.6 billion in cash. The cash portion was funded by a new $1.0 billion unsecured senior term loan facility, drawings from its global line of credit, and the monetization of hedges.

What is the significance of the 4.5 million OP Units issued to KTR?

The issuance of 4.5 million OP Units to KTR is part of the consideration for the acquisition. These units represent limited partnership interests in Prologis, L.P. and are redeemable for cash or, at Prologis' option, for shares of Prologis common stock, starting one year after their issuance. This allows KTR to participate in Prologis' future success.

What is the structure of the joint venture for this acquisition?

The acquired real estate assets were placed into Prologis U.S. Logistics Venture, a consolidated joint venture. Prologis holds a 55% stake in this venture, while Norges Bank Investment Management (manager of the Norwegian Government Pension Fund Global) holds the remaining 45%.

PLD 8-K: Acquisitions & Dispositions, Financial Events & More

Q: What was the main event reported in this 8-K filing?

The primary event reported is the completion of Prologis' acquisition of KTR Capital Partners' real estate assets and operating platform for a total of $5.9 billion. This acquisition significantly expands Prologis' industrial real estate portfolio.

Summary

Prologis, Inc. (PLD) filed an 8-K on June 1, 2015, primarily announcing the completion of its acquisition of KTR Capital Partners' real estate assets and operating platform for a total purchase price of $5.9 billion. This significant acquisition was made through Prologis U.S. Logistics Venture, a joint venture with Norges Bank Investment Management. The acquired assets significantly expand Prologis' portfolio, adding approximately 60 million square feet of operating properties, development projects, and land with substantial build-out potential. This strategic move is expected to enhance Prologis' market position and drive future growth. The filing also details the financing structure for this acquisition, including a new $1.0 billion unsecured senior term loan facility and the issuance of 4.5 million common limited partnership units (OP Units) to KTR. These OP Units are redeemable for cash or Prologis common stock after one year. The company also entered into a $1.0 billion unsecured senior term loan facility, which was fully drawn at closing to help finance the acquisition. These financial maneuvers demonstrate Prologis' capacity to execute large-scale transactions and manage its capital structure effectively.

Key Highlights

1Completion of a $5.9 billion acquisition of KTR Capital Partners' real estate assets and operating platform.
2Acquisition made through a 55-45 consolidated joint venture with Norges Bank Investment Management (NBIM).
3Acquired assets include approximately 60 million sq ft operating portfolio, 3.6 million sq ft under development, and significant land bank.
4Prologis' share of the acquisition valued at approximately $3.2 billion, comprising debt assumption, OP Units, and cash.
5Secured a new $1.0 billion unsecured senior term loan facility, fully drawn to fund the acquisition.
6Issued 4.5 million Prologis OP Units to KTR as part of the transaction consideration, redeemable after one year.
7Terminated a previously announced $1.0 billion bridge loan facility from Morgan Stanley Senior Funding, Inc.

Prologis, Inc. 8-K Report, Acquisition Completed (Jun 1, 2015)

Summary

Key Highlights

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