DEFM14A: Plymouth Industrial REIT to Go Private in $22/Share Cash Deal

Plymouth Industrial REIT, Inc. stockholders are set to receive $22.00 per share in cash as the company merges with affiliates of Makarora and Ares, following a unanimous board recommendation.

Summary

• Plymouth Industrial REIT, Inc. (Plymouth) will merge with PIR Industrial REIT LLC, a subsidiary of PIR Ventures LP (Parent), for $22.00 per share in cash.
• The Operating Partnership will also merge with PIR Industrial OP LLC, a wholly-owned subsidiary of REIT Merger Sub.
• The $22.00 per share cash consideration represents a premium of approximately 50% to Plymouth's unaffected closing common stock price of $14.64 on August 18, 2025.
• The Board of Directors unanimously recommends stockholders vote FOR the Merger Proposal, FOR the Merger Compensation Proposal, and FOR the Adjournment Proposal.
• The total transaction value is anticipated to be approximately $2.1 billion, funded by up to $700 million in equity from Makarora and Ares, and up to $1.443 billion in debt financing.
• The merger is expected to close in early 2026, subject to stockholder approval and other customary closing conditions.
• The go-shop period, which allowed Plymouth to solicit alternative acquisition proposals, expired on November 23, 2025, without any superior offers.
• Existing restricted stock awards will become fully vested and converted into the right to receive the cash consideration, while performance stock units will be canceled and converted into cash based on the greater of target or actual pro-rated performance.

Sentiment

Score: 8

Explanation: The acquisition price of $22.00 per share represents a substantial 50% premium over the unaffected stock price, offering a compelling and certain cash exit for shareholders. The unanimous board recommendation, coupled with fairness opinions from two financial advisors, underscores the attractiveness of the offer. The expiration of the go-shop period without superior proposals further validates the current offer as the best available. While the company's standalone prospects faced challenges like high leverage and a persistent market discount, this all-cash transaction provides immediate, superior value and liquidity, making it a strong positive for current shareholders.

Positives

• Stockholders receive a fixed cash amount of $22.00 per share, providing certainty of value and immediate liquidity.
• The merger consideration represents a significant premium of approximately 50% over the unaffected closing stock price of $14.64 on August 18, 2025.
• The transaction is not subject to a financing condition, with committed equity and debt financing in place, increasing closing certainty.
• The go-shop period allowed the company to actively solicit alternative proposals, ensuring a thorough market check, though no superior offers emerged.
• The financial strength and industry expertise of Makarora and Ares provide confidence in the acquirer.
• The limited number and nature of conditions to complete the mergers, and the absence of regulatory approvals, increase the likelihood of timely consummation.
• The merger addresses the general risks and uncertainties of remaining an independent public company, including challenges in acquiring industrial assets, tenant defaults, smaller scale, higher leverage, and a persistent stock price discount to NAV and peers.

Negatives

• Stockholders will no longer participate in any future earnings or growth of the company as it will cease to be an independent public entity.
• The merger is a fully taxable transaction for U.S. federal income tax purposes for U.S. holders.
• Stockholders are not entitled to appraisal or dissenters' rights under Maryland law.
• The company is restricted from making regular quarterly cash dividends or distributions, except as necessary to preserve its REIT tax status, prior to the merger.
• There is a risk that the financing for the Isosceles JV debt assumption may not obtain necessary consents, potentially leading to acceleration of that debt.
• Restrictions on the company's business conduct prior to closing could prevent it from pursuing strategic opportunities or responding to competitive pressures.
• The company is subject to a $40.1 million termination fee (or $15.0 million under specific circumstances) if the merger agreement is terminated under certain conditions, which could deter competing bids.
• The company's remedies in case of Parent's breach or failure to close are limited to a reverse termination fee of $70.2 million and certain enforcement costs, which may be inadequate.
• The announcement and pendency of the transaction could adversely impact relationships with tenants, suppliers, and employees, and lead to potential litigation.
• Some directors and executive officers have interests in the mergers that are different from general stockholders.

Risks

• Inflation, deflation, and general interest rate levels.
• Financing risks, including insufficient cash flows for debt payments and inability to refinance existing debt or obtain new financing on attractive terms.
• The uncertainty and economic impact of pandemics, epidemics, or other public health emergencies.
• The competitive environment in which the company operates.
• Real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants.
• Decreased rental rates or increasing vacancy rates.
• Potential defaults on or non-renewal of leases by tenants.
• Potential bankruptcy or insolvency of tenants.
• Acquisition risks, including failure of such acquisitions to perform in accordance with projections.
• The timing of acquisitions and dispositions.
• Potential natural disasters such as earthquakes, wildfires, or floods, and man-made disasters.
• National, international, regional, and local economic conditions.
• Potential changes in law or governmental regulations that affect the company, including real estate and zoning or REIT tax laws, potential increases in real property tax rates, and changes to trade policies.
• Lack of or insufficient amounts of insurance.
• Possible cybersecurity breaches.
• The company's ability to maintain its qualification as a REIT.
• Possible environmental liabilities, including costs, fines, or penalties due to necessary remediation of contamination.
• The occurrence of any event, change, or other circumstances that could give rise to the termination of the Merger Agreement.
• The nature, cost, and outcome of any litigation and other legal proceedings, including any related to the transaction.
• The inability to consummate the mergers within the anticipated time period, or at all, due to any reason, including failure to obtain stockholder approval or satisfy other conditions.
• Risks that the proposed mergers disrupt current plans and operations or divert management's attention.
• The amount of the costs, fees, expenses, and charges related to the proposed mergers.
• The risk that the Merger Agreement may be terminated in circumstances requiring the company to pay a termination fee.
• The effect of the announcement of the proposed mergers on the company's ability to retain and hire key personnel and maintain relationships with tenants, suppliers, and others.
• The effect of the announcement of the proposed mergers on the company's operating results and business generally.
• The risk that the company's stock price may decline significantly if the proposed mergers are not consummated.
• The fact that the amount of Parent's debt financing could be reduced under certain circumstances and that Parent had not committed to increase its equity financing to offset any reduction.
• The fact that Parent may require certain additional financing to the extent Parent determines to repay additional indebtedness of the Isosceles JV in connection with the transactions.
• The fact that Parent is a newly formed entity with essentially no assets and the limited guaranty is capped at $76.7 million.

Future Outlook

The company anticipates the merger will be completed in early 2026, leading to its delisting from the NYSE and deregistration under the Exchange Act. The board believes the fixed cash consideration provides certainty and liquidity, outweighing the risks and uncertainties of remaining an independent public company, such as challenges in acquiring industrial assets, tenant defaults, higher cost of capital, and a persistent stock price discount. The company intends to maintain its REIT status until the merger's effective time.

Management Comments

• "Our board of directors unanimously recommends that you vote FOR the Merger Proposal, FOR the Merger Compensation Proposal and FOR the Adjournment Proposal." (Jeffrey E. Witherell, Chairman of the Board and Chief Executive Officer)
• "The Company is always open to opportunities to enhance its stockholder value." (Jeffrey E. Witherell, paraphrased)
• Makarora's representative stated that the purchase price was reduced from the September 2 Makarora Proposal due to negative due diligence findings and a softened macro and industrial market in the Company’s geographies.
• SSP's representative indicated that it would no longer pursue the acquisition of the Company if it was not granted a period of exclusivity.
• SSP's representative suggested that SSP would be supportive if the Company were to elect to pursue a transaction with one of the other parties.
• Mr. Witherell informed the board that Party B was unable to confirm how much additional time would be required for it to complete its due diligence and receive the necessary approvals to be in a position to execute definitive transaction documents.
• Party B's representative reiterated that Party B would not be able to enter into a transaction unless they were able to renegotiate certain terms of the Isosceles JV Agreement.
• Party A's representative informed KBCM and J.P. Morgan that Party A's view as to the Company's value had declined, and that Party A would not be in a position to submit a proposal superior to Makarora's.

Industry Context

The merger occurs in an industrial real estate market where the company, despite its focus on distribution centers, warehouses, and light industrial properties, faces challenges due to its smaller scale and higher leverage profile compared to larger public industrial REITs. This has resulted in a higher cost of capital for new acquisitions and a persistent stock price discount to net asset value (NAV) and peer multiples. The transaction provides a definitive exit for shareholders at a premium, mitigating these inherent industry and company-specific challenges. The competitive environment and the difficulty in acquiring assets on attractive terms are key drivers for the board's decision to pursue the sale.

Comparison to Industry Standards

• KBCM's comparable public companies analysis identified STAG Industrial, Inc. (NYSE: STAG) and LXP Industrial Trust (NYSE: LXP) as comparable, but noted they are significantly larger and have different leverage profiles, historically trading at higher P/FFO multiples.
• The average capitalization rate for STAG Industrial, Inc. (6.5%) and LXP Industrial Trust (7.1%) was 6.8%, which KBCM used for sensitivity analysis.
• KBCM's discounted future share price analysis used an implied P/FFO multiple derived from STAG and LXP, applying the Company's average historic discount of approximately 3.9x FFO from the preceding three years.
• KBCM's net asset value analysis reviewed 3,896 industrial asset sale transactions in the same MSAs as the Company's properties, closed since January 2022, with similar quality and disclosed price per square footage data.
• The Isosceles JV was assumed to be sold at a 6.85% capitalization rate, based on the median capitalization rate in comparable single asset transactions in the Chicago MSA since 2022.
• KBCM's premiums paid analysis reviewed 39 selected publicly announced precedent transactions involving acquisitions of publicly-held REITs by strategic buyers and financial sponsors since January 1, 2019, excluding withdrawn transactions. The median premiums paid were 21.7% (1-day), 21.6% (1-week), and 23.6% (4-week) for all transactions, and 25.3% (1-day), 23.8% (1-week), and 25.8% (4-week) for take-privates.

Management Changes

Corporate Governance

Legal Proceedings

• Demand letters received from purported stockholders alleging disclosure deficiencies in the preliminary proxy statement filed on December 8, 2025, demanding corrective or supplemental disclosures.
• Potential for additional demand letters and lawsuits arising out of the Demand Letters or otherwise challenging the acquisition or making other claims in connection therewith.

Related Party Transactions

• The Merger Agreement itself is a transaction between the Company and Parent, an affiliate of Makarora and Ares.
• The Equity Investors (Makarora and Ares) are affiliates of Parent and are providing equity financing for the transaction.
• A Limited Guaranty was delivered by the Equity Investors in favor of the Company and Operating Partnership, guaranteeing certain payment obligations of Parent.
• An affiliate of SSP (a 9.99% beneficial owner) entered into a securities purchase agreement with the Company and Operating Partnership on August 26, 2024, for Series C Preferred Units and warrants, and a board observer agreement.
• SSP holds a 65% equity interest in Isosceles JV, LLC, with the Operating Partnership holding 35%. Issues with the Isosceles JV Agreement and loan documents were a factor in Makarora's revised offer and SSP's withdrawal from a higher bid.
• A side letter between Makarora and SSP regarding the Isosceles JV was executed simultaneously with the Merger Agreement, addressing certain transfers and obligations.
• Certain interests of directors and executive officers in the mergers are different from general stockholders, including accelerated equity vesting and severance benefits, with actions taken to mitigate Section 280G impact.

Stakeholder Impact

• Shareholders: Will receive $22.00 per share in cash, providing immediate liquidity and a significant premium over the unaffected stock price. Will cease to be shareholders of a public company and will not participate in future growth. No appraisal rights.
• Employees: Continuing employees will receive annual base salary/wage rate, annual target incentive compensation opportunities, and employee benefits no less favorable for 12 months post-merger. Severance payments and benefits are provided for qualifying terminations within a 12-month protection period. Executive officers have accelerated equity vesting and severance benefits.
• Tenants/Suppliers: Potential for disruption to existing business relationships due to the announcement and pendency of the transaction.
• Creditors: Parent expects to repay outstanding indebtedness under the unsecured credit facility and 100% on-balance sheet loans. Debt related to joint venture properties is expected to be assumed by Parent, but if consents are not obtained, such debt may accelerate.
• Management: Executive officers and directors have specific financial interests tied to the merger, including accelerated vesting of equity awards and severance packages.

Next Steps

• Hold a Special Meeting of Stockholders on January 22, 2026, to vote on the Merger Proposal, Merger Compensation Proposal, and Adjournment Proposal.
• If approved, the mergers are anticipated to be completed in early 2026.
• Following completion, common stock will be delisted from the NYSE and deregistered under the Exchange Act.
• Parent, REIT Merger Sub, and OP Merger Sub will cause the Partnership Merger and REIT Merger to be consummated by filing certificates of merger with the Delaware Secretary of State and Maryland State Department of Assessments and Taxation.
• Parent will cause the paying agent to mail instruction letters to stockholders for exchanging shares for cash consideration.
• Parent and the REIT Surviving Entity will provide employee benefits and severance for continuing employees for 12 months post-merger.
• Company will cause directors and officers to resign, effective immediately prior to the REIT Merger Effective Time.

Key Dates

Recommendation

The acquisition price of $22.00 per share represents a substantial 50% premium over the unaffected stock price, offering a compelling and certain cash exit for shareholders. The unanimous board recommendation, coupled with fairness opinions from two financial advisors, underscores the attractiveness of the offer. The expiration of the go-shop period without superior proposals further validates the current offer as the best available. While the company's standalone prospects faced challenges like high leverage and a persistent market discount, this all-cash transaction provides immediate, superior value and liquidity, making it a strong positive for current shareholders.

Keywords

REIT Merger, Industrial Real Estate, Plymouth Industrial REIT, PIR Ventures LP, Makarora, Ares, Cash Acquisition, SEC Filing, Proxy Statement, Corporate Governance, Shareholder Vote, Real Estate Investment Trust, Industrial Properties, Merger Agreement, Stockholder Approval, Go-Shop Period, Debt Financing, Equity Financing, Delisting, Deregistration, Taxable Transaction, Executive Compensation, Fairness Opinion