Kite Realty Buys Inland Diversified for $2.1B

Kite Realty Group Trust, an Indianapolis-based REIT, announced this week that it had entered into a definitive merger agreement with Inland Diversified Real Estate Trust by which Inland Diversified will merge with and into a wholly owned subsidiary of Kite Realty. The stock-for-stock merger has a transaction value of approximately $2.1 billion and an equity value of approximately $1.2 billion, and increases Kite Realty's portfolio to 131 properties totaling more than 20 million owned square feet in 26 states with a combined enterprise value of approximately $3.9 billion.

"We are extremely pleased to announce what is a transformational transaction for our company. Inland Diversified has assembled a very well located, high quality portfolio," said John Kite, Kite Realty's Chairman and Chief Executive Officer. "The asset and tenant quality and strong demographic profile will be a great complement to our portfolio. With this transaction, we will be able to substantially increase the size and scale of our portfolio in our core markets and enter into attractive new markets. This transaction will further strengthen our balance sheet and enhance our cash flow, positioning us favorably for future growth and shareholder value creation."

"We're excited to see the process we've been engaged in culminate in this transformational event for our company and our stockholders," said Barry Lazarus, president and chief operating officer at Inland Diversified. "This transaction achieves our goal of maximizing value and provides an opportunity for our stockholders to either remain part of the well capitalized combined company or liquidate their investment. It is extremely gratifying for the entire Inland Diversified management team to be part of the successful formation and operation of Inland Diversified, as well as its merger with Kite, a leading shopping center company that is listed on the New York Stock Exchange."

Inland Diversified has entered into a contract to sell its single tenant net lease portfolio to Realty Income Corporation for $503 million, a deal that is expected to close prior to the closing of the merger. Inland owns 57 well-leased shopping centers in 22 states, including attractive markets such as Westchester, N.Y.; Bayonne, N.J.; Las Vegas; Virginia Beach, Va; and Salt Lake City, according to an Indianapolis Star article.

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