Stoneleigh Partners Acquisition (stock symbol: [t]SOC[/t]), which raised $222.8 million when it went public on June 1, 2007, has announced that it has signed an agreement to acquire Realty Finance Corporation, "a commercial real estate specialty finance company primarily focused on managing a diversified portfolio of commercial real estate-related loans and securities."
Stoneleigh Partners Acquisition Corp. Enters Into a Letter of Intent with Realty Finance Corporation
Wednesday April 8, 2009, 4:00 pm EDT
SOUTH NORWALK, Conn., April 8 Stoneleigh Partners Acquisition Corp. ("Stoneleigh") (NYSE Alternext: SOC, SOC-U, SOC-WT), a special purpose acquisition company, today announced that it has entered into a letter of intent for a transaction with Realty Finance Corporation ("RFC"), a commercial real estate specialty finance company primarily focused on managing a diversified portfolio of commercial real estate-related loans and securities. As of December 31, 2008, the net carrying value of RFC's investments was approximately $1.2 billion and its GAAP book value was $218 million. RFC's portfolio is comprised solely of commercial real estate debt and equity investments. RFC has long-term financing in place through the issuance of two CDO's. Additional information regarding RFC can be found at www.realtyfinancecorp.com.
Under the terms of the transaction, Stoneleigh will acquire a controlling interest in RFC. Stoneleigh will receive 31,000,000 shares of newly issued RFC common stock and a $31,250,000 principal amount senior secured note of RFC for which Stoneleigh will pay to RFC $25,000,000 in cash. Stoneleigh shall have the option to adjust its investment to any amount between $20,000,000 and $150,000,000; provided, however, that the number of shares of common stock and principal amount of notes shall be adjusted proportionately. The note will be secured by a first priority senior secured position in all of the assets of RFC, including the capital stock of RFC's subsidiaries, and bear interest at the rate of 8%. Stoneleigh will have the right to appoint three of six members to RFC's board of directors upon the closing of the transaction. Stoneleigh intends for the transaction to constitute a business combination as provided in its certificate of incorporation.
Stoneleigh intends to seek stockholder approval to amend its certificate of incorporation to extend its corporate existence to enable it to complete the proposed transaction.
About Realty Finance Corporation
Realty Finance Corporation is a commercial real estate specialty finance company primarily focused on originating, acquiring, investing in, financing and managing a diversified portfolio of commercial real estate-related loans and securities. Realty Finance Corporation has elected to qualify to be taxed as a real estate investment trust, or REIT, for federal income tax purposes. For more information on the Company, please visit the Company's website at realtyfinancecorp.com.
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