PLYM Plymouth Industrial REIT Inc

AIP Realty Trust (the “Trust” or “AIP”) (TSXV: AIP.U) today announces that it, through its subsidiary AIP OP, LP (“OP LP”), has entered into a securities purchase agreement (the “Securities Purchase Agreement”) with 2024 ATIP, Inc. (“ATIP”) pursuant to which the Trust proposes to acquire (the “AllTrades Transaction”) all of the issued and outstanding membership interests (“Membership Interests”) of AllTrades Industrial Properties, LLC (“AllTrades”). OP LP is a Delaware limited partnership of which AIP Realty USA, Inc. (the “REIT”), a subsidiary of the Trust, serves as general partner. Pursuant to the AllTrades Transaction, among other things, OP LP will acquire all of the Membership Interests, the consideration for which is expected to be comprised of the following:

• Pending the results of an independent third-party valuation (the “Formal Valuation”), the aggregate consideration for the Membership Interests is expected to be up to US$78,700,000 (the “Purchase Price”);
• On closing of the AllTrades Transaction:
  • OP LP will pay cash consideration equal to the amount of indebtedness of AllTrades and any of its subsidiaries plus the transaction expenses; and
  • OP LP will issue to ATIP an amount equal to 25% of the aggregate Purchase Price in series B preferred partnership units of OP LP (the “LP Units”) to be issued at a price equivalent to the price per class A trust unit of the Trust (“Units”) to be issued under an offering (the proceeds of which are expected to be used to fund a portion of the Purchase Price) to be completed by the Trust, which LP Units will be convertible into class A trust units of the Trust (“Units”);
• The remainder of the Purchase Price will be paid, if earned, on the first, second, third and fourth anniversaries of the closing date of the AllTrades Transaction by the issuance by OP LP to AllTrades of LP Units as of such anniversary dates, with such number of LP Units to be issued equal to the aggregate amount of “Building Starts” (defined in the Securities Purchase Agreement as each “approval by the board of trustees of the Trust of the development of a new AllTrades-branded Service Industrial Business Suite (“SIBs”) building, and the receipt of equity financing necessary to build such building”) between such anniversaries multiplied by US$1,119,886 per Building Start, divided by the volume-weighted average price of the Units for the thirty (30) trading days immediately preceding such payment date.

The AllTrades Transaction remains subject to customary closing conditions including approval from the TSX Venture Exchange (the “TSXV”), approval of Trust unitholders (as further described below), the completion of the Formal Valuation and a fairness opinion to be provided by Raymond James Ltd., and no material adverse effects, among others. The AllTrades Transaction is anticipated to constitute a “Reverse Takeover” as defined in the policies of the TSXV and, accordingly, further information regarding the AllTrades Transaction will be disclosed by the Trust in a comprehensive news release to be filed on the Trust’s SEDAR+ profile at www.sedarplus.com.

“We are excited to begin putting in place all the components necessary for the execution of AIP’s expansion plans to build a significant portfolio of AllTrades branded light industrial asset class of SIBs across the Sunbelt States of the United States. Having AllTrades, a fully vertical integrated development and construction company, as part of AIP will streamline the rollout process in conjunction with AIP,” said Les Wulf, Executive Chairman of AIP Realty Trust.

AIP also announces that it has closed a securities purchase transaction whereby Plymouth Industrial OP, LP, a subsidiary of Plymouth Industrial REIT, Inc. (“Plymouth”), purchased an aggregate of 4,400,000 Series A-1 Preferred Limited Partnership Interests (the “OP Units”) of OP LP at a price of US$0.50 per OP Unit for aggregate cash consideration of US$2,200,000 (the “Plymouth Transaction”). The Plymouth Transaction was carried out pursuant to the terms of an investment agreement among the Trust, the REIT, OP LP and Plymouth, dated as of the date hereof.

“We believe there is a void in the existing light industrial flex marketplace which primarily consists of old and obsolete buildings. The AllTrades asset class of SIBs buildings filling a missing niche in the market for high-quality turnkey facilities in established communities, and I look forward to working with AIP as they execute its rollout plans.” said Jeffrey Witherell, the co-founder, Chairman and Chief Executive Officer of Plymouth.

The OP Units acquired by Plymouth will be exchangeable for Units pursuant to the terms of an exchange agreement, dated as of the date hereof (the “Exchange Agreement”), among the Trust, OP LP, the REIT and Plymouth, such exchange right to be effective upon receipt of unitholder approval of the AllTrades Transaction and any necessary approvals of the TSXV. In connection with the Plymouth Transaction: (i) the Trust, OP LP, Plymouth, AIP Realty Management, LLC (“AIP Management”) and AIP Eagle Court, LLC, a wholly-owned indirect subsidiary of the Trust (“AIP Eagle Court”), entered into a put agreement, dated as of the date hereof (the “Put Agreement”), which provides Plymouth with a right to cause OP LP to repurchase its preferred limited partnership interests issued to Plymouth at the original cost in the event that the AllTrades Transaction is not completed on or before June 30, 2025 or following certain other events, for a period of 180 days; and (ii) and Plymouth and AIP Management, the holder of all of the equity of AIP Eagle Court, entered into a Pledge and Security Agreement, dated as of the date hereof, pursuant to which AIP Management pledged all of its ownership interest in AIP Eagle Court to Plymouth to secure payment of OP LP’s obligations under the Put Agreement; and (iii) AIP Eagle Court granted Plymouth a second priority lien on certain real property and all structures, buildings and improvements on the AIP Eagle Court facility pursuant to a Junior Deed of Trust, Assignment of Lease and Rents and Security Agreement.

Pursuant to the terms of an investor rights agreement (the “Investor Rights Agreement”) among the Trust, Plymouth and OP LP, dated as of the date hereof, the Trust shall designate Mr. Witherell as an observer authorized to attend meetings of the board of trustees of the Trust (the “Board”). Further, Plymouth will be afforded approval rights whereby the Trust shall not take or implement certain corporate actions without in each instance first obtaining written approval from Plymouth. Following the completion of the AllTrades Transaction, the Investor Rights Agreement will terminate and in accordance with the terms of the Exchange Agreement, the Trust will, if requested by Plymouth, cause the appointment of Mr. Witherell to the Board.

Completion of the Plymouth Transaction remains subject to approval from the TSXV.

The Trust intends to use the proceeds of the Plymouth Transaction for working capital and general corporate purposes, and to fund the costs associated with proceeding to completion of the proposed AllTrades Transaction (including preliminary audit fees, legal fees, costs of preparing the necessary documentation, independent valuation costs, etc.) The Plymouth Transaction is necessary in order to complete the AllTrades Transaction as the Trust does not have sufficient financial resources to pay for the foregoing costs if it is unable to raise sufficient funding from other sources to satisfy current expenditures in anticipation of the AllTrades Transaction. The Plymouth Transaction is being completed independently of the completion of the AllTrades Transaction with the funds made available for the Trust’s use immediately upon closing of the Plymouth Transaction. It is expected that any concurrent financing to be completed in connection with the closing of the AllTrades Transaction will be structured on substantially similar terms (in respect of security and offering price).

Related Party DisclosureThe Trust’s independent trustees have conducted a review and analysis of the AllTrades Transaction and the potential benefits to the Trust, and have approved proceeding with executing the Securities Purchase Agreement and the broader AllTrades Transaction, subject to receipt of necessary unitholder and TSXV approvals, and subject to the independent trustees oversight over Building Starts. Leslie Wulf, Bruce Hall and Greg Vorwaller have recused and will continue to recuse themselves from all discussions or deliberation relating to the approval of the AllTrades Transaction, including in particular approval of each individual Building Start contemplated thereunder. As part of their diligence efforts in connection with the approval of individual Building Starts, the independent trustees will obtain independent appraisals and audited financial statements pertaining to the specific SIBs. In the event that each appraisal and set of audited financial statements support a purchase price relating to each Building Start that is acceptable to the independent trustees, the independent trustees will make a recommendation to the Board, with Leslie Wulf, Bruce Hall and Greg Vorwaller recused, to proceed with such Building Starts.

The independent trustees are responsible for supervising the process to be carried out by AIP and its professional advisors in connection with the AllTrades Transaction, making recommendations to the Board, with Leslie Wulf, Bruce Hall and Greg Vorwaller recusing, in respect of matters that it considered relevant with respect to the AllTrades Transaction, and ensuring that AIP performs its obligations as contemplated in connection with the AllTrades Transaction in compliance with the requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”), AIP’s declaration of trust and applicable policies of the TSXV. The AllTrades Transaction may constitute a “related party transaction” under MI 61-101 as the AllTrades facilities are currently owned by AIP DFW II, LLC and AIP DFW II, LLC (collectively, “AIPDFW”), entities owned indirectly by Trinity and directly by AllTrades Industrial Development LLC (“AID”), a subsidiary of AllTrades. Three of the trustees and officers of AIP, namely Leslie Wulf, Bruce Hall and Greg Vorwaller, are directors and officers of AllTrades. Bruce Hall, also serves as Chief Financial Officer of AID, manager of AIPDFW. The Trust did not file a material change report in respect of the AllTrades Transaction at least 21 days before closing, which the Trust deems reasonable in the circumstances in order to permit the Trust to enter into the Securities Purchase Agreement concurrently with the Plymouth Transaction documents in an expeditious manner.

The Trust will be seeking unitholder approval for a resolution in respect of the AllTrades Transaction (the “AllTrades Transaction Resolution”). The AllTrades Transaction Resolution requires the affirmative vote of not less than two-thirds (66⅔%) of the votes validly cast on the AllTrades Transaction Resolution by disinterested unitholders present in person or represented by proxy at the special meeting of the unitholders expected to be held in the coming months (the “Meeting”) and will exclude any votes cast in respect of Units required to be excluded pursuant to MI 61-101.

In connection with the AllTrades Transaction, ValueScope, Inc. has been engaged by the Trust to prepare the Formal Valuation of AllTrades and its assets in the manner prescribed by MI 61-101. A copy of the Formal Valuation will be provided to unitholders of AIP in the management information circular (the “Circular”) to be distributed to unitholders in connection with the Meeting. A copy of the Circular will be made available under the Trust’s SEDAR+ profile at www.sedarplus.com.

About AIP Realty TrustAIP Realty Trust is a real estate unit investment trust with a growing portfolio of AllTrades branded SIBS light industrial flex facilities focused on small businesses and the trades and services sectors in the U.S. These properties appeal to a diverse range of small space users, such as contractors, skilled trades, suppliers, repair services, last-mile providers, small businesses and assembly and distribution firms. They typically offer attractive fundamentals including low tenant turnover, stable cash flow and low capex intensity, as well as significant growth opportunities. With an initial focus on the Dallas-Fort Worth market, AIP plans to roll out this innovative property offering nationally. For more information, please visit www.aiprealtytrust.com.

About PlymouthPlymouth Industrial REIT, Inc. (NYSE: PLYM) is a full service, vertically integrated real estate investment company focused on the acquisition, ownership and management of single and multi-tenant industrial properties. Our mission is to provide tenants with cost effective space that is functional, flexible and safe.

For further information from the Trust, contact:Leslie WulfExecutive Chairman(214) 679-5263les.wulf@aiprealtytrust.com

Or

Greg VorwallerChief Executive Officer(778) 918-8262greg.vorwaller@aiprealtytrust.com

Cautionary Statement on Forward-Looking InformationThis press release contains statements which constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of AIP Realty Trust with respect to future business activities and operating performance, the closing of the AllTrades Transaction, the aggregate consideration to be paid under the AllTrades Transaction, exchange of OP Units for Units, the approval of Plymouth for matters of the Trust requiring consent pursuant to the Investor Rights Agreement, approval by unitholders of the AllTrades Transaction Resolution, the closing of the AllTrades Transaction, completion of the proposed offering by the Trust, exercise of Plymouth’s rights pursuant to the Put Agreement and the impacts on liquidity of the Trust. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” or similar expressions and includes information regarding the ability to obtain regulatory and unitholder approvals and other factors. When or if used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target”, “plan”, “forecast”, “may”, “schedule” and similar words or expressions identify forward-looking statements or information. These forward-looking statements or information may relate to proposed financing activity, proposed acquisitions, regulatory or government requirements or approvals, the reliability of third-party information and other factors or information. Such statements represent the Trust’s current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Trust, are inherently subject to significant business, economic, competitive, political and social risks, contingencies and uncertainties. Many factors, both known and unknown, could cause results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements. The Trust does not intend, and do not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements and information other than as required by applicable laws, rules and regulations.

The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. All forward-looking statements in this news release are made as of the date of this news release. AIP does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

This news release is not an offer of securities for sale in the United States. The securities may not be offered or sold in the United States absent registration or an exemption from registration under U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”). The Trust has not registered and will not register the securities under the U.S. Securities Act. The Trust does not intend to engage in a public offering of their securities in the United States.

Source: AIP Realty Trust