News

Broadstone Net Lease, Inc. Announces Agreement to Internalize Management

Substantial cost savings anticipated to be in excess of $25 million in the first year

Simplified structure with greater alignment between shareholders and management

Continued leadership by management with a track record of profitable growth

ROCHESTER, N.Y. — Broadstone Net Lease, Inc. (“BNL”) today announced that it has entered into a definitive agreement providing for the internalization of the external management functions currently performed for BNL by Broadstone Real Estate, LLC (the “Manager”) and its affiliates through a series of transactions involving the acquisition of the Manager by BNL’s operating company, Broadstone Net Lease, LLC (the “Operating Company”) (such transactions, the “Internalization”), which will result in BNL becoming internally managed. Upon closing, upfront consideration paid to the Manager will be $300 million in cash, stock and operating partnership units, with the potential for additional earnout consideration of $75 million over four tranches of increasing performance incentives, further described below. The transaction is expected to close early in the first quarter of 2020, subject to the satisfaction of certain conditions to closing.

This internalization transaction is the result of a diligent and detailed process led by the BNL Special Committee,” said Laurie Hawkes, Lead Independent Director and Chairperson of the Special Committee. “We believe that the transaction has numerous positive benefits for BNL shareholders, the most important of which are the substantial cash savings and alignment of management interests, as compared to the existing external management structure.

The BNL management team is very excited about this transition and the continuity it provides in our management of Broadstone Net Lease,” said Chris Czarnecki, BNL’s CEO & President. “The entire team remains deeply committed to our mission of growing shareholder value and believes this internalized format provides opportunity for more accretive growth into the future.

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