American Realty Capital Retail Centers of America to be Acquired by - PowerPoint PPT Presentation

American Realty Capital – Retail Centers of America to be Acquired by American Finance Trust

CREATING A DIVERSIFIED REIT WITH A RETAIL FOCUS Broke Escrow March 2012 American Finance Trust Inc. (“AFIN”) to acquire American Closed Initial Public Offering Realty Capital – Retail Centers of America (“RCA”) for September 2014 common stock and cash having an estimated value of of $1.5 billion (1)  Approximate total Combined Enterprise Value (1) : $3.9 billion consideration of $10.26 per Acquired $1.2bn in high-quality Target Closing: Q1 2017 share of RCA common stock power and lifestyle centers  $0.95 cash and 0.385 share of June 2012 - December 2015 AFIN common stock per share of RCA common stock Merger with AFIN Target Closing: Q1 2017 (1) Enterprise values calculated using shares outstanding as of December 15, 2016 and net debt balances as of September 30, 2016; implied equity values for RCA and AFIN are calculated based on an implied offer price of approximately $10.26 per RCA share and AFIN’s published estimated per share NAV as of December 31, 2015 A MERICAN R EALTY C APITAL – R ETAIL C ENTERS OF A MERICA , I NC . of $24.17, respectively; the enterprise value may not reflect the price at which AFIN's shares would trade if they 2 were listed on an exchange.

TRANSACTION BENEFITS AFIN and RCA merger will create a scaled, diversified REIT with a retail focus • Combined enterprise value (1) of $3.9 billion; rentable square footage growing from 7.5 million to 20.3 million (2) Increases Scale and • Increased size and scale expected to provide better access to capital, improve cost of capital, and better position the Positions Company combined company for future listing (3) or other liquidity options for Future Liquidity • Large, diversified portfolio provides greater flexibility to sell assets without materially impacting company cash flow • Annual savings expected in 2017 of $10.9 million from a reduction of $6.1 million (3) in asset management fees and Material Cost Savings $4.8 million (4) of duplicative corporate G&A • Enhanced diversification by property type, tenant base and geography, which reduces exposure to individual property Further Portfolio sector market cycles Diversification • Greater diversification reduces risk and broadens the revenue base of the combined company Meaningful • RCA shareholders will own approximately 37% (5) of a national portfolio of retail and triple net lease properties well Participation in Future positioned for future growth Prospects of Combined Company Distribution Parity for • Post transaction distribution per exchanged RCA common share will remain $0.64 per share, in line with existing RCA Shareholders RCA distribution per share (6) (1) Enterprise values calculated using shares outstanding as of December 15, 2016 and net debt balances as of September 30, 2016; implied equity values for RCA and AFIN are calculated based on an implied offer price of approximately $10.26 per RCA share and AFIN’s published estimated per share NAV as of December 31, 2015 of $24.17, respectively. Also gives effect to the disposition by AFIN of the properties referred to as the Merrill Lynch Properties, which are subject to a purchase and sale agreement. Please refer to the “Definitions” slide. (2) (3) AFIN has received authorization from the New York Stock Exchange (the "NYSE") (which was received in September 2016 and extended in November 2016) to list the AFIN common stock on the NYSE, subject to AFIN being in compliance with all applicable listing standards on the date it begins trading on the exchange. AFIN’s approval for listing i s valid through August 2017 and AFIN may apply to extend the outside date for listing. AFIN does not intend to list its common stock on the NYSE prior to the closing of the merger, and accordingly, at the time of closing, AFIN will be a non-traded entity. While AFIN intends to list the AFIN common stock subsequent to the closing of the merger at a time to be determined by the AFIN board, there can be no assurance as to when or if AFIN common stock will commence trading on the exchange. (4) Management fee savings in year 1; base management fee under the new AFIN advisory agreement will increase in subsequent years. (5) Includes estimated G&A, consisting of reductions in expenses for audit, tax, accounting, legal, and other professional services; estimates prepared by AFIN management. (6) Based on fully diluted shares outstanding as of December 15, 2016. A MERICAN R EALTY C APITAL – R ETAIL C ENTERS OF A MERICA , I NC . 3 (7) Based on exchange ratio of 0.385 and AFIN's annualized daily distribution.

TRANSACTION DETAILS • $0.95 in cash and 0.385 shares of AFIN common stock for each share of RCA common stock (1) Consideration • Total consideration of approximately $10.26 per share of RCA, based on AFIN’s published estimated per share NAV as of December 31, 2015 of $24.17 • AFIN currently pays an annualized distribution of $1.65 per share Distributions • Based on the 0.385 exchange ratio, RCA shareholders will receive an implied distribution of $0.64 per exchanged share, which is equivalent to the per share distribution RCA shareholders currently receive on an annual basis Pro Forma • Post transaction, RCA shareholders will own approximately 37% (2) of the combined company’s common stock Ownership • At closing, two RCA independent directors will be appointed to the AFIN board, bringing the total number of Corporate Oversight directors to six, including five independent directors and Management • AFIN will also add key members of RCA’s management team (3) , combining teams with proven track-records of managing acquisitions and dispositions throughout the real estate cycle and across asset classes • 45-day Go-Shop period to solicit a superior offer expired October 21, 2016, RCA’s financial advisor contacted Go-Shop over 80 potential bidders, but no alternative acquisition proposals were provided by third parties • RCA would be obligated to pay 2.5% of equity price, or $25.6 million, or expense reimbursement up to $5.0 million, if the transaction is terminated as a result of entering into or recommending a superior acquisition Breakup Fee proposal or as a result of other customary termination events • Additionally, AFIN would be obligated to pay 2.5% of equity price, or $25.6 million, or expense reimbursement of up to $5.0 million, if the transaction is terminated for certain customary termination events. • Announcement Date: September 7, 2016 • Record Date: December 15, 2016 Timing • Shareholder Meeting: February 13, 2017 • Anticipated Closing Date: Q1 2017 (1) In addition to the consideration of $0.95 in cash and 0.385 AFIN shares for each RCA share, each outstanding RCA OP Unit (other than the RCA OP Units held by RCA) will convert into 0.424 AFIN OP Units, each outstanding RCA OP Unit and RCA GP Unit held by RCA will convert into 0.385 AFIN OP Units, the 479,802 Class B RCA Units held by American Realty Ca pital Retail Advisor, LLC (the “RCA Advisor” or our “Advisor”) and a sub -advisor will convert into AFIN OP Units at a 0.424 exchange ratio, and RCA Advisor’s subordinated participation will be redeemed for a cash payment, to be determined in accordance with the existing terms of the subordination participation. Based on the per share value of the AFIN common shares issuable in the transaction (using AFIN's published estimated per share NAV as of December 31, 2015 of $24.17) and the cumulative distributions through September 30, 2016, the redemption payment would have been approximately $3.1 million if the transaction had been consummated on September 30, 2016. The actual redemption payment will be computed in accordance with the foregoing based on cumulative distributions and the 7.00 % performance hurdle rate applicable to the computation through the date of consummation of the transaction. (2) Based on fully diluted shares outstanding as of December 15, 2016. (3) AFIN continues its discussions with Lincoln Property Company ("Lincoln") to enter a property A MERICAN R EALTY C APITAL – R ETAIL C ENTERS OF A MERICA , I NC . 4 management agreement for the management of multi-tenant properties post-transaction.

MERGER COMBINES TWO HIGH QUALITY ASSET PORTFOLIOS Merger creates significant scale, while increasing property type, tenant and geographical diversification (4)(5) Enterprise Value (1) $1.4 billion $2.5 billion $3.9 billion Number of Properties 35 458 490 Number of Tenants 398 43 433 Square Footage 7.5 million 13.3 million 20.3 million States (2) 16 37 39 Weighted Average 5.2 years 9.4 years 7.8 years Remaining Lease Term (3) Occupancy 92.9% 100.0% 97.4% Annualized Straight-Line $13.03 $12.40 $12.34 Rent / Square Foot Top 10 Tenant 28.1% 75.3% 47.7% Concentration (3) Note: Data as of September 30, 2016. (1) Enterprise values calculated using shares outstanding as of December 15, 2016 and net debt balances as of September 30, 2016; implied equity values for RCA and AFIN are calculated based on an implied offer price of approximately $10.26 per RCA share and AFIN’s published estimated per share NAV as of December 31, 2015 of $24.17, respectively. (2) Includes Washington, D.C. (3) Based on annualized straight-line rent. (4) Represents pro forma combined company. (5) Also gives effect to the disposition by AFIN of the properties referred to as the Merrill Lynch Properties, which are sub ject to a purchase and sale agreement. Please refer to the “Definitions” slide. A MERICAN R EALTY C APITAL – R ETAIL C ENTERS OF A MERICA , I NC . 5