Market Overview

M&A Poises Michigan Companies for Success


When people think of Detroit, they sometimes think of a run down city with little going for it. Contrary to popular belief, companies in the metro-Detroit area are thriving and have kicked off 2012 with plans for success. One such company is Agree Realty Corporation (NYSE: ADC), a small-cap real estate investment trust headquartered in Farmington Hills, Michigan.

Agree Realty recently announced about $10.3 million in acquisitions, picking up a Wawa gas station, a Walgreens (NYSE: WAG), and a CVS (NYSE: CVS) pharmacy in two different states. Agree Realty funded the three acquisitions with approximately $3.4 million in debt financing and $7 million in equity financing.

Agree Realty's President and Chief Operating Officer, Joey Agree, mentioned that the company is "excited to add these properties to [its] expanding portfolio of net lease assets." Currently, Agree's portfolio contains about 87 properties located in 21 states across the US.

Over the last several years, Agree Realty has divested itself from the Borders Books and Music franchise. Perhaps catalyzed by Borders' dissolution, Agree Realty has found ways to expand its investments to include banks, pharmacies, grocery stores, and restaurants. Joey Agree also mentioned that "these acquisitions continue to diversify [its] portfolio of industry-leading retailers."

Although 2012 has just started, investors may believe that Agree Realty is poised to expand its operations and continue its streak of success throughout the year. Its strategic acquisitions represent a diversified company seeking relatively safe, lucrative investments. This may be an investment style suited for some investors when global economics are increasingly uncertain.

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Posted-In: News Small Cap Analysis Small Cap M&A Events Global Economics Markets Best of Benzinga


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