Automotive Properties Real Estate Investment Trust, better known to some by its TSX symbol APR.UN, has completed its initial public offering of 7.5 million trust units of the REIT and hit the market on Wednesday.
At a price of $10.00 per unit, the offering raised gross proceeds of $75 million.
Dilawri has taken the initiative in creating the REIT in order to establish a growth-oriented real estate entity that will focus on owning and acquiring primarily income-producing automotive dealership properties located in Canada.
In connection with the closing, the REIT used the proceeds of the offering, together with drawdowns under the REIT's credit facilities, to indirectly acquire, through Automotive Properties Limited Partnership from subsidiaries of Dilawri or entities related to Dilawri, 26 income-producing commercial properties for a total purchase price of approximately $354.2 million.
On closing, Dilawri, together with its subsidiary 2243718 Ontario Inc., indirectly owns, controls or directs roughly 57 per cent effective interest in the REIT on a fully-diluted basis through ownership of 9,933,253 of the Class B limited partnership units that were issued at a price of $10 per unit as partial consideration for the purchase by the Partnership of the Initial Properties.
The Class B limited partnership units are economically equivalent to and exchangeable on a one-for-one basis (subject to customary anti-dilution protections) for Units and are accompanied by “special voting units” which entitle the holder to an equivalent number of votes in the REIT.
Dilawri has advised the REIT that it is the current intention of Dilawri to retain a significant interest in the REIT for the foreseeable future. Automotive Properties REIT is also the only publically traded REIT focused on the auto industry in Canada.