Spirit Realty Capital, Inc. (NYSE:SRC) signed a definitive agreement to acquire Cole Credit Property Trust II Inc. in a reverse merger transaction on January 22, 2013. Under the terms of the agreement, each share of Cole shall remain outstanding in the surviving entity and Spirit Realty shareholders will receive, at a fixed exchange ratio of 1.9048, shares of the surviving entity for each share of Spirit Realty common stock owned. The merger agreement provides that, in connection with the termination of the merger agreement under specified circumstances, either may be required to pay to the other a termination fee of $55 million and/or reimburse the other transaction expenses up to an amount equal to $10 million.

The combined company will retain the Spirit Realty name and trade on the New York Stock Exchange under the ticker symbol “SRC". The current management team of Spirit Realty will lead the combined company. Following the close, Cole Credit shareholders are expected to own approximately 56% and Spirit Realty shareholders approximately 44% of the common shares of the combined REIT. Spirit Realty's largest shareholders, Macquarie Capital and TPG-Axon, who together own approximately 15% of Spirit Realty, have executed agreements that state their intention to vote in favor of the transaction. The combined company will have a nine-member Board of Directors, seven of whom will be existing Board members of Spirit Realty and two who will be representatives from Cole Credit. The current management team of Spirit Realty will lead the combined company.

The completion of the transaction is subject to the receipt of approval of the majority of shares outstanding of Spirit Realty and Cole Credit, dismissal of litigation, approval of lenders of Spirit and Cole, the authorization of the listing on the New York Stock Exchange, the registration statement on Form S-4 registering the applicable surviving corporation common stock to be issued as consideration for the mergers having been declared effective by the Securities and Exchange Commission, the obtaining of certain third party consents and customary regulatory approvals and closing conditions. The Boards of Directors of Cole Credit and Spirit Realty have unanimously approved the definitive agreement. A special committee of independent Directors of the Board of Directors of Cole has unanimously determined and declared that this agreement is in the best interest of the shareholders. The transaction is expected to close in the third quarter of 2013. The transaction is expected to be slightly accretive to Spirit Realty's funds from operations per share following closing, pending completion of Spirit Realty's purchase accounting analysis.

As on May 8, 2013, the agreement was amended. As per the amended terms of the transaction, the holders of fractional shares of Cole Credit common stock outstanding immediately prior to the effective time of transaction and holders of Spirit common stock are entitled to receive fractional share consideration. The consideration shall be equal to such fractional part of a share of Cole Credit common stock multiplied by the product of the volume weighted average price of Spirit common stock for the 10 trading days immediately prior to the closing date, starting with the opening of trading on the first trading day to the closing of the second to last trading day prior to the closing date and 0.525.

As of June 12, 2013, approximately 86% of the outstanding shares of Spirit Realty Capital common stock voted to approve the merger.

Barclays acted as financial advisor and Charles Ruck, David Wheeler, John Raney, Kelsey Chin, David Teh, Robert Buday, Nathan Logan, Rachel Bates, Michael Brody, Ana O'Brien, Eric Cho, David Taub, Michelle Carpenter, Julian Kleindorfer and Bradley A. Helms of Latham & Watkins LLP acted as legal advisor for Spirit Realty. Morgan Stanley & Co. LLC and UBS Investment Bank acted as financial advisors for Cole Credit, and Gilbert G. Menna and Suzanne D. Lecaroz of Goodwin Procter LLP acted as legal advisor to Cole Credit. Gleacher & Company Securities, Inc. served as financial advisor to the special committee of Cole Credit and John M. Loder, Peter Welsh and Amanda McGrady Morrison of Ropes & Gray LLP served as legal advisors to the special committee of Cole Credit. Chuck Burgess and Chuck Dohrenwend of The Abernathy MacGregor Group acted as PR advisors for Spirit Realty. Paul Caminiti, Brooke Gordon and Samantha Verdile of Sard Verbinnen & Co and Eric Waters of Great Ink Communications acted as Public Relation advisors for Cole Credit. Denise A. Cerasani of White & Case acted as legal advisor for UBS Investment Bank. Alison Ressler and Benjamin Weber of Sullivan & Cromwell LLP acted as legal advisors to Cole Holdings as owner of the external manager to Cole Credit Property Trust II. Boston Financial Data Services, Inc. acted as information agent for Cole and Broadridge Investor Communication Solutions, Inc. acted as information agent for Spirit. Boston Financial Data Services, Inc. will be paid a fee of $0.07 million, Broadridge Investor Communication Solutions, Inc. will be paid a fee of $0.02 million, Gleacher will be paid a fee of $3.5 million, Barclays will be paid a fee of $13 million, Morgan Stanley and UBS will each be paid a fee equal to 0.3375% of Cole's equity value plus the principal amount of Cole's debt prior to closing of deal, of which $1.525 million is payable in connection of Morgan Stanley's and UBS' engagement and delivery of their opinion and the balance of which is contingent upon closing of the transaction.