Sila Realty Trust, Inc. Announces Final Results of Modified “Dutch Auction” Tender Offer

Rhea-AI Summary

Sila Realty Trust (NYSE: SILA), a healthcare-focused net lease REIT, has completed its modified 'Dutch Auction' tender offer. The company accepted 2,212,389 shares at $22.60 per share, totaling approximately $50 million. This represents about 3.9% of outstanding shares as of July 19, 2024. Due to oversubscription, Sila accepted roughly 42% of properly tendered shares on a pro rata basis. After the offer, Sila has approximately 55.0 million shares outstanding. Payment for accepted shares occurred on July 23, 2024. Wells Fargo Securities acted as advisor for Sila's NYSE listing on June 13, 2024, and as dealer manager for the offer. Georgeson served as the information agent.

Positive

• Successfully completed $50 million share repurchase program
• Reduced outstanding shares by 3.9%, potentially increasing value for remaining shareholders
• Strong shareholder interest with oversubscribed tender offer

Negative

• Significant cash outlay of $50 million for share repurchase

Insights

Financial Analyst

The completion of Sila Realty Trust's Dutch Auction tender offer is significant for investors as it directly affects the company's capital structure and shareholder value. By purchasing $50 million worth of shares at $22.60 per share, Sila demonstrates confidence in their stock valuation, potentially signaling to the market that they believe their shares are undervalued. This move reduces the number of outstanding shares (by 3.9%), which can boost earnings per share (EPS) in the long term and may positively impact stock price due to improved perceived value.

From a financial standpoint, the ability to execute a $50 million tender offer implies robust liquidity and financial health. Such actions are typically seen as shareholder-friendly, enhancing investor sentiment. However, it's important to consider the cost implications, including fees and expenses and the longer-term impact on cash reserves. Investors should monitor subsequent quarterly earnings to assess how this buyback influences the company's financials.

Market Research Analyst

Market dynamics play a important role in understanding the implications of this tender offer. The healthcare sector is known for its resilience and Sila Realty Trust's strategic focus here aligns well with market trends favoring stable, long-term investments. The oversubscription of the offer, with 42% acceptance on a pro-rata basis, indicates strong investor interest and possibly a belief in future growth prospects. This could mean that investors are optimistic about the company's strategic direction and market positioning.

It's also noteworthy that the company managed to get listed on the NYSE recently, indicating a level of maturity and credibility in the market. This listing can enhance visibility and potentially attract more institutional investors, which may lead to higher trading volumes and liquidity for the stock. Retail investors should consider these factors when evaluating the potential for capital appreciation and stability in their portfolio.

Legal Expert

The execution of a Dutch Auction tender offer involves several legal and regulatory considerations, all of which appear to have been meticulously managed by Sila Realty Trust. The involvement of reputable firms like Wells Fargo Securities and Georgeson LLC ensures that the process adheres to best practices and regulatory standards, which is reassuring for investors concerned about compliance and ethical governance.

It is essential to note the pro-rata acceptance of shares, which is a fair and transparent method for handling oversubscriptions. This reduces the likelihood of legal disputes from shareholders who tendered their shares. The prompt return of unpurchased shares also reflects a well-organized operation, minimizing disruption for investors. Legal oversight in such large-scale financial maneuvers ensures the company's adherence to fiduciary responsibilities, fostering trust among stakeholders.

TAMPA, Fla.--(BUSINESS WIRE)-- Sila Realty Trust, Inc. (NYSE: SILA) (“Sila”, the “Company”, “we” or “us”), a net lease real estate investment trust (“REIT”) with a strategic investment focus on the significant, growing, and resilient healthcare sector, today announced the final results of its modified “Dutch Auction” tender offer (the “Offer”) to purchase for cash up to $50 million in value of shares of the Company’s common stock, which expired at 5:00 p.m., New York City time, on July 19, 2024.

Based on the final count by Computershare Trust Company, N.A., the depositary and paying agent for the Offer (the “Depositary”), 4,670,381 shares of common stock were validly tendered at the final purchase price of $22.60 per share and not properly withdrawn.

In accordance with the terms and conditions of the Offer, and based on the final count by the Depositary, the Company has accepted for purchase 2,212,389 shares of common stock at a purchase price of $22.60 per share, for an aggregate cost of approximately $50 million, excluding fees and expenses relating to the Offer.

The number of shares of common stock that the Company has accepted to purchase in the Offer represents approximately 3.9% of the total number of shares of common stock outstanding as of July 19, 2024. Following payment for the shares of common stock purchased in the Offer, the Company had approximately 55.0 million shares of common stock outstanding.

Due to the oversubscription of the Offer, based on the final count described above, the Company accepted for purchase on a pro rata basis approximately 42% of the shares of common stock properly tendered and not properly withdrawn at the purchase price of $22.60 per share (other than “odd lot” holders, whose shares of common stock were purchased in full on a priority basis).

Payment to the Depositary for the shares of common stock accepted for purchase under the Offer occurred on July 23, 2024. Shares of common stock tendered and not accepted for purchase will be returned promptly to shareholders. The Depositary will issue payment for the shares of common stock validly tendered and accepted for purchase in accordance with the terms and conditions of the Offer.

Wells Fargo Securities, LLC acted as advisor to management and the board of directors of the Company for the Company’s listing on the New York Stock Exchange on June 13, 2024. Georgeson LLC acted as information agent for the Offer with Wells Fargo Securities, LLC acting as dealer manager for the Offer.

Shareholders who have questions or would like additional information about the Offer may contact the information agent for the Offer, Georgeson LLC at (866) 643-7359, or the dealer manager for the Offer, Wells Fargo Securities, LLC at (800) 645-3751.

Important Notice

This press release is for informational purposes only and is not an offer to buy or the solicitation of an offer to sell any securities of the Company.

About Sila Realty Trust, Inc.

Sila Realty Trust, Inc. is a net lease real estate investment trust headquartered in Tampa, Florida, with a strategic focus on investing in the significant, growing, and resilient healthcare sector of the U.S. economy. The Company invests in high quality healthcare facilities along the continuum of care, which, we believe, generate predictable, durable, and growing income streams. Our portfolio comprises high-quality tenants in geographically diverse facilities, which are positioned to capitalize on the dynamic delivery of healthcare to patients. As of March 31, 2024, the Company owned 136 real estate properties and two undeveloped land parcels located in 64 markets across the U.S. For more information, please visit the Company’s website at www.silarealtytrust.com.

Forward-Looking Statements

Certain statements contained herein, other than historical fact, may be considered “forward-looking statements.” These statements are based on management’s current expectations and beliefs and are subject to a number of trends and uncertainties. No forward-looking statement is intended to, nor shall it, serve as a guarantee of future performance. You can identify the forward-looking statements by the use of words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will” and other similar terms and phrases. Forward-looking statements are subject to various risks and uncertainties and factors that could cause actual results to differ materially from the Company's expectations, and you should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond the Company's control and could materially affect the Company's results of operations, financial condition, cash flows, performance or future achievements or events. Additional factors include those described under the section entitled Item 1A. "Risk Factors" of Part I of the Company's 2023 Annual Report on Form 10-K with the SEC, copies of which are available at www.sec.gov. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240724750432/en/

Investor Contact:

Miles Callahan, Senior Vice President of Capital Markets and Investor Relations

833-404-4107

IR@silarealtytrust.com

Source: Sila Realty Trust, Inc.

FAQ

What was the final purchase price per share in Sila Realty Trust's (SILA) tender offer?

The final purchase price in Sila Realty Trust's (SILA) tender offer was $22.60 per share.

How many shares did Sila Realty Trust (SILA) accept in its tender offer?

Sila Realty Trust (SILA) accepted 2,212,389 shares in its tender offer, representing approximately 3.9% of the total outstanding shares as of July 19, 2024.

When did Sila Realty Trust (SILA) complete its tender offer payment?

Sila Realty Trust (SILA) completed the payment for accepted shares in its tender offer on July 23, 2024.

What percentage of tendered shares did Sila Realty Trust (SILA) accept due to oversubscription?

Due to oversubscription, Sila Realty Trust (SILA) accepted approximately 42% of the shares properly tendered at the purchase price of $22.60 per share.