Adventus Announces Closing of its Merger and Management Internalization

August 07, 2019

Adventus Realty Trust is pleased to announce the closing of the previously announced merger of Adventus Realty Trust ("ART") and Adventus Opportunity Fund ("AOF") and the internalization of management, effective August 1, 2019. The transactions were completed pursuant to a plan of arrangement (the "Plan of Arrangement") which was approved by the Supreme Court of British Columbia.

Details of the transactions are contained in the Information Circular and Information Memorandum dated June 20, 2019, provided to investors in the various Adventus Group entities.

The merger of ART and AOF was the subject of Fairness Opinions for each of ART and AOF, independent legal advice to each Fund and unanimous approvals of the Boards of Directors of the trustees of each of ART and AOF.

Pursuant to the Plan of Arrangement, the following transactions occurred:

1. Pre-Merger Management Internalization

  • Units of Adventus Realty Limited Partnership ("ARLP") were acquired by ART. Holders of ARLP Units will receive US$0.01 in cash for each ARLP Unit, effectively representing the original purchase price paid for these units. This amount has been paid to TSX Trust Company and has been forwarded to former holders of ARLP Units.
  • Shares of Adventus Capital Partners Ltd. ("ACP") were transferred to ART. Holders of shares of ACP received one ART Unit for each ACP Share at a value of US$17.00 per ART Unit. The transfer of ACP Shares to ART for ART Units constitutes a taxable disposition of ACP Shares for proceeds of disposition equal to US$17.00 per ART Share. This transaction resulted in the issuance of an aggregate of 802,646 ART Units to the former shareholders of ACP.

2. Merger

  • ART Unitholders: As the Merger transaction was as an acquisition of AOF Units by ART, there are no tax consequences for ART Unitholders as such.
  • AOF Unitholders: Holders of units of AOF received, for each AOF Unit held, 0.6651 of an ART Unit, resulting in the issuance of an aggregate of 2,176,374 ART Units to the former holders of AOF Units. The Plan of Arrangement has been structured so that Canadian resident holders of AOF Units should receive ART Units in exchange for their AOF Units with the following income tax consequences:

    1) Canadian Tax: The Units of AOF can be exchanged by holders on a tax-deferred basis, by making an election under Section 85 of the Income Tax Act (Canada) to deem the proceeds of disposition of their AOF Units to be equal to their adjusted cost base. This defers the recognition of any gain to a future disposition of the ART Units. The Section 85 Election can be made by completing prescribed Canadian Revenue Agency Form T2057 ‘Election on Disposition of Property By a Taxpayer to a Taxable Canadian Corporation’. Drafts of these T2057 election forms will be prepared by Adventus management with the assistance of BDO Canada LLP ("BDO"). Access to these draft forms, including detailed instructions on how to review and file those forms, will be available on a web portal hosted by BDO. Log in access to the web portal will be provided by September 30, 2019.

    2) US Tax: The exchange of AOF Units for ART Units should not result in any income tax consequences under the US Internal Revenue Code and there is no requirement for filing under the Foreign Investment in Real Property Tax Act ("FIRPTA") provisions of the US Internal Revenue Code.

As a result of the Plan of Arrangement, as of August 1, 2019, ART has 18,335,796 issued and outstanding units.

About Adventus Realty Trust

Adventus Realty Trust is a Canadian based private Real Estate Investment Trust (REIT) and is focused on US income producing commercial real estate, in the suburban office markets of Chicago, Illinois and Atlanta, Georgia. For more information on Adventus Realty Trust, including our team, corporate strategy, photo gallery, details of our portfolio and press releases, we invite you to visit our website at www.adventusrealty.com.

Cautionary Statements Regarding Forward-Looking Statements

This press release may contain forward-looking statements with respect to the REIT and its operations, strategy, financial performance and financial condition, as well as with respect to the previously disclosed acquisitions and future acquisitions of properties. These statements generally can be identified by the use of forward-looking terminology such as "anticipate", "believe", "plan", "forecast", "expect", "intend", "would", "could", "if", "may" and similar expressions. The actual results and performance of the REIT and the acquisitions discussed herein could differ materially from those expressed or implied by such statements. Accordingly, readers should not place undue reliance on forward-looking statements. These cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, changes in interest rates, competition and changes in securities or other laws or regulations or the application thereof. The cautionary statements qualify all forward-looking statements attributable to the REIT and persons acting on its behalf.

Unless otherwise stated, all forward-looking statements speak only as of the date of this press release. Except as required by applicable law, the REIT specifically disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

ADVENTUS REALTY TRUST
By its Trustee: ADVENTUS REALTY SERVICES INC.
Per: Rodney B. Johnston, FCPA, FCA
President and CEO

Investors News Releases Adventus Announces Closing of its Merger and Management Internalization