Zolak
O stock’s recent acquisitions
The thesis of this article is to argue how recent acquisition activity by Realty Income Corporation (NYSE:O) is a double-edged sword. While boosting its portfolio and further growth potential, they also add quite a bit of uncertainty to shareholder returns, in my view.
Realty recently completed its merger with industry peer Spirit Realty Capital, Inc. Under the terms of the deal, which closed in January this year, Spirit holders received 0.762 of a share of Realty Income common stock, for a total enterprise value of $9.3 billion. Besides Spirit Realty Capital, the company has also made other sizable acquisitions in recent years. Another notable example was the VEREIT acquisition in late 2021. At that time, Realty acquired commercial property owner VEREIT for $11 billion, with that deal also paid for through the issuance of common stock. On one side, the addition of VEREIT and Spirit enhances the…
