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Wednesday, October 1, 2014

Schorsch's RCS Capital adds to private-REIT arsenal, (NASDAQ: ARCP), (NYSE: RCAP)

RCS Capital Corp, which has amassed an army of almost 10,000 independent brokers in just over a year, said on Wednesday it is buying a firm that manages private real estate investment trusts (REITs) for retail investors. RCS, whose executive chairman is Nicholas Schorsch, will pay at least $700 million in cash or stock and debt to purchase Cole Capital from American Realty Capital Properties Inc, a company in which Schorsch also is a major shareholder. RCS could pay up to an additional $130 million if Cole hits certain profit goals. The deal is expected to close by yearend.Cole's asset management revenue, sales force and specialty REITs are tied to lease payments from businesses such as fast-food franchisees in single-occupancy buildings. The acquisition will diversify RCS's revenue sources and add more than $73 million to earnings before interest, taxes, depreciation and amortization in 2015, Chief Executive Michael Weil said."What I'm most excited about," he told investors in a conference call, " creating what is a significant recurring revenue stream based on asset management."The retail brokerage business is by far the largest of RCS's six businesses, accounting for 43.5 percent of its earnings last quarter.

American Realty Capital Properties, Inc., is a real estate investment trust (REIT). Shares of ARCP fell by 0.21% or $-0.025/share to $12.04. In the past year, the shares have traded as low as $11.76 and as high as $14.96. On average, 9755940 shares of ARCP exchange hands on a given day and today's volume is recorded at 32062456.

RCS Capital Corporation is a holding company. The Company is engaged in the business of wholesale broker-dealer, investment banking and capital markets business, a transaction management services provider and a transfer agent. Shares of RCAP traded higher by 5.73% or $1.29/share to $23.81. In the past year, the shares have traded as low as $15.51 and as high as $39.98. On average, 539514 shares of RCAP exchange hands on a given day and today's volume is recorded at 2465127.



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