Franklin BSP Realty Trust, Inc. and Capstead Mortgage Corporation Announce Completion of Merger
Franklin BSP Realty Trust, Inc. (f/k/a Benefit Street Partners Realty Trust, Inc.) (“FBRT” or the “Company”) and Capstead Mortgage Corporation (NYSE: CMO) (“Capstead”) today announced the completion of their previously announced merger pursuant to the terms of the Agreement and Plan of Merger, dated as of July 25, 2021, as amended by the First Amendment to Agreement and Plan of Merger, dated as of September 22, 2021 (as amended, the “Merger Agreement”), by and among FBRT, Capstead, Rodeo Sub I, LLC, a wholly-owned subsidiary of FBRT, and FBRT’s external manager, Benefit Street Partners L.L.C. (“BSP”). After the close of trading on October 18, 2021, Capstead ceased to be publicly traded on the New York Stock Exchange (“NYSE”). At the open of trading on October 19, 2021, the combined company will trade on the NYSE under the ticker symbol “FBRT.”
Highlights of the Merger Completion
- At the effective time of the merger, each issued and outstanding share of common stock of Capstead (“Capstead Common Stock”) was converted into the right to receive (i) from FBRT, 0.3288 newly-issued shares of common stock of FBRT (“FBRT Common Stock”), (ii) from FBRT, cash consideration of $0.21 per share and (iii) from BSP, cash consideration of $0.73 per share. As an illustrative example, a stockholder holding 10,000 shares of Capstead Common Stock would receive 3,288 shares of FBRT Common Stock from FBRT, $2,100.00 of cash consideration from FBRT and $7,300.00 of cash consideration from BSP. FBRT will pay cash in lieu of any fractional shares of FBRT Common Stock that would otherwise have been received as a result of the merger.
- In addition, each outstanding share of Capstead’s 7.50% Series E Cumulative Redeemable Preferred Stock was converted into the right to receive one newly-issued share of FBRT’s 7.50% Series E Cumulative Redeemable Preferred Stock (the “FBRT Series E Preferred Stock”). At the open of trading on October 19, 2021, the FBRT Series E Preferred Stock will trade on the NYSE under the ticker symbol “FBRT PRE.”
- Pursuant to the Merger Agreement, three former Capstead independent directors, Pat Augustine, Michelle Goolsby and Gary Keiser, were appointed to FBRT’s Board of Directors.
- Common stock repurchase programs totaling $100 million will be available to support the combined company’s common stock trading level beginning approximately four weeks following the closing of the merger.
Richard J. Byrne, President and Chief Executive Officer of FBRT, said, “We are excited and look forward to the many opportunities that lay ahead as the fourth largest publicly-traded commercial mortgage REIT. Given our scale, focus on middle-market commercial real estate mortgages and our differentiated investment platform, we are well positioned to deliver attractive returns over the long-term. Leveraging BSP’s strong deal sourcing and underwriting capabilities supported by Franklin Templeton’s world class sponsorship, FBRT is poised to be an industry-leading mortgage REIT that we believe will continue to deliver strong growth and superior long-term value for our stockholders.”