Global Net Lease (GNL) Announces \$535 Million Acquisition of Modiv Industrial: Major Portfolio Transformation and Immediate Shareholder Benefits

Key Points of the Transaction

• GNL to Acquire Modiv Industrial in All-Stock, Leverage-Neutral Deal: The enterprise value of the transaction is approximately \$535 million. The deal is structured as an all-stock merger, requiring no external capital and is leverage-neutral, preserving GNL’s balance sheet strength.
• Immediate 4% Accretion to AFFO per Share: The transaction is projected to be immediately 4% accretive to GNL’s Adjusted Funds From Operations (AFFO) per share, a key metric for REIT investors.
• Enhanced Portfolio Quality: The acquisition brings high-quality, mission-critical industrial net-lease assets into GNL’s portfolio, with a weighted average lease term (WALT) of 15 years, 45% investment-grade tenants, and 2.4% annual rent escalations.
• Significant Dividend Increase for Modiv Shareholders: Modiv shareholders are expected to receive a 25% increase in annual dividends, paid quarterly, compared to their current monthly dividends, upon closing of the transaction.
• Premium to Modiv Shareholders: The conversion ratio is 1.975 GNL shares for each Modiv share, implying a value of \$18.82 per Modiv share—a 17% premium to Modiv’s last trading price prior to announcement, and a 28% premium to its unaffected price before its January 2026 strategic update.
• Ownership Structure Post-Deal: Upon closing, GNL shareholders will own approximately 89% of the combined company, and Modiv shareholders will own approximately 11%.
• Cost and Operational Synergies: The combined company expects to realize approximately \$6 million in annual cost synergies, mainly from eliminating duplicative general and administrative expenses.
• Reduction in Office Exposure: The transaction significantly increases GNL’s exposure to industrial assets and reduces office concentration, enhancing portfolio diversification and resilience.
• Leadership Continuity: No changes to GNL’s executive management team or Board of Directors are anticipated.
• Transaction Timeline: The deal is expected to close in the third quarter of 2026, subject to Modiv shareholder approval and customary closing conditions. GNL shareholder approval is not required.

Details for Shareholders and Price-Sensitive Information

• Transaction Structure and Consideration: Modiv shareholders and OP unit holders will receive 1.975 GNL shares or units per Modiv share/unit held at closing. This structure offers both a cash-value premium and the ability to participate in the future growth of a larger, more liquid REIT.
• Dividend Implications: Modiv shareholders will benefit from a 25% increase in annual dividends after the merger closes, a significant improvement in income potential.
• Portfolio Metrics:
  • Modiv’s portfolio WALT: 15.0 years (compared to GNL’s 6.1 years pre-transaction; pro forma WALT will meaningfully increase).
  • 45% of Modiv’s annual base rent is derived from investment-grade tenants (23% actual ratings, 22% implied).
  • 2.4% average annual rent escalations provide strong built-in cash flow growth.
• Financial Strength: The transaction is leverage-neutral. GNL will repay all of Modiv’s debt and preferred stock using its revolving credit facility and cash on hand, maintaining financial flexibility and balance sheet strength.
• Strategic Rationale:
  • Accelerates GNL’s transition to earnings growth post-deleveraging.
  • Further reduces office exposure and increases industrial asset weighting—an important factor for REIT investors focused on sector allocation.
  • Enhances GNL’s scale, trading liquidity, and access to capital, supporting future growth and value creation.
• Management and Board Support: The boards of both companies have unanimously approved the deal. Modiv’s CEO, Aaron Halfacre, will roll over his entire position into GNL shares, signaling confidence in the combined company’s prospects.
• Shareholder Action Required: Modiv shareholders must approve the transaction. GNL shareholders do not need to vote.
• Regulatory Filings: GNL will file a registration statement on Form S-4 with the SEC, including the proxy statement/prospectus for Modiv shareholders. Investors are urged to read these documents when available.

Strategic Benefits and Statements from Leadership

Michael Weil, CEO of GNL: “We believe this transaction is a compelling opportunity for GNL to expedite our transition to earnings growth in 2026 following the completion of our deleveraging initiative while continuing to reduce our office exposure. Modiv’s high-quality portfolio provides durable and predictable cash flows and aligns well with our objectives of enhancing earnings and long-term portfolio quality. Modiv stockholders will receive GNL shares offering a highly attractive dividend yield, enhanced trading liquidity, and long-term value creation.”

Rob Kauffman, Non-Executive Chairperson of GNL: “This combination will generate meaningful long-term value for stockholders of both companies.”

Aaron Halfacre, President & CEO of Modiv: “This transaction represents the best opportunity for Modiv investors to receive compelling value today and participate in future upside as continuing investors in GNL. The deal is expected to result in a 25% increase in annual dividend income for Modiv investors. I intend to roll over my entire position and believe the combined portfolio will thrive under GNL’s leadership.”

Thomas H. Nolan, Jr., Chairman of Modiv: “After a thorough and disciplined review process, our Board unanimously determined that this transaction represents the best outcome for our stockholders and validates the strength of our platform.”

Additional Information and Next Steps

• Transaction closing is expected in Q3 2026, subject to Modiv shareholder approval and other customary conditions.
• Modiv will suspend its customary quarterly earnings releases and conference calls until the transaction closes.
• Investors are strongly encouraged to read the forthcoming proxy materials and SEC filings for complete details.

Advisors

• GNL: BMO Capital Markets (financial advisor); Paul, Weiss, Rifkind, Wharton & Garrison LLP and Greenberg Traurig, LLP (legal counsel).
• Modiv: Truist Securities (financial advisor); Morrison & Foerster LLP and Venable LLP (legal counsel).

Potential Risks and Forward-Looking Statements

The transaction is subject to risks including, but not limited to, failure to obtain required shareholder approvals, possible disruption to operations, fluctuations in GNL’s share price, and other factors described in the companies’ SEC filings. Forward-looking statements are based on current expectations and are subject to change; actual results may differ materially.

Disclaimer

This article is for informational purposes only and is not intended as investment advice or a recommendation to buy or sell any securities. Investors should review all SEC filings and consult with their financial advisors before making any investment decisions. The transaction described herein is subject to shareholder approval and other customary closing conditions. Forward-looking statements involve risks and uncertainties; actual results may differ materially from those anticipated.

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