Toggle SGML Header (+)


Section 1: 8-K (8-K)

8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

April 29, 2018

 

 

DCT INDUSTRIAL TRUST INC.

DCT INDUSTRIAL OPERATING PARTNERSHIP LP

(Exact Name of Registrants as Specified In Charter)

 

 

 

Maryland (DCT Industrial Trust Inc.)   001-33201   82-0538520
Delaware (DCT Industrial Operating Partnership LP)   333-195185   82-0538522

(State or Other Jurisdiction of

Incorporation of Organization)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

555 17th Street, Suite 3700

Denver, CO

  80202
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (303) 597-2400

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2.):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

DCT Industrial Trust Inc.

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

DCT Industrial Operating Partnership LP

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 7.01 Regulation FD Disclosure.

On April 29, 2018, DCT Industrial Trust Inc. ( “DCT”) and Prologis, Inc. (“Prologis”) issued a joint press release announcing the execution of the Agreement and Plan of Merger (the “Merger Agreement”) by and among Prologis and Prologis, L.P. (collectively, the “Prologis Parties”), on the one hand, and DCT and DCT Industrial Operating Partnership LP (collectively, the “DCT Parties”), on the other hand. The full text of the press release is attached hereto as Exhibit 99.1.

Also on April 29, 2018, DCT posted an investor presentation to its website at the Investor Relations section of http:/investors.dctindustrial.com/Corporate Profile related to the transactions contemplated by the Merger Agreement (the “Mergers”) and sent an e-mail communication to its employees with information with respect to the Mergers. The investor presentation provides information on both Prologis and DCT and an overview of the strategic rationale for the transaction. The presentation and employee communication are attached hereto as Exhibit 99.2 and Exhibit 99.3, respectively.

The information furnished under this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit

Number.

  

Description

99.1    Joint Press Release dated April 29, 2018.
99.2    Investor Presentation
99.3    Employee Communication

ADDITIONAL INFORMATION

This Current Report on Form 8-K may be deemed to be solicitation material in respect of the proposed transaction. In connection with the proposed transaction, Prologis will file a registration statement on Form S-4, which will include a document that serves as a prospectus of Prologis and a proxy statement of DCT (the “proxy statement/prospectus”), and each party will file other documents regarding the proposed transaction with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A definitive proxy statement/prospectus will be sent to DCT’s shareholders. Investors and security holders will be able to obtain the registration statement and the proxy statement/prospectus free of charge from the SEC’s website or from Prologis or DCT. The documents filed by Prologis with the SEC may be obtained free of charge at the Investor Relations section of Prologis’s website at www.ir.prologis.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Prologis by requesting them from Investor Relations by mail at Pier 1, Bay 1 San Francisco, CA 94111 or by telephone at 415-394-9000. The documents filed by DCT with the SEC may be obtained free of charge at DCT’s website at the Investor Relations section of http:/investors.dctindustrial.com/Corporate Profile or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from DCT by requesting them from Investor Relations by mail at 555 17th Street, Suite 3700 Denver, CO 80202, or by telephone at 303-597-1550.


PARTICIPANTS IN THE SOLICITATION

DCT and Prologis and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about DCT’s directors and executive officers is available in DCT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in its proxy statement dated March 21, 2018, for its 2018 Annual Meeting of Shareholders. Information about Prologis’s directors and executive officers is available in Prologis’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in its proxy statement dated March 22, 2018, for its 2018 Annual Meeting of Shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the transaction when they become available. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Prologis or DCT as indicated above.

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.


EXHIBIT INDEX

 

Exhibit

Number.

  

Description

99.1    Joint Press Release dated April 29, 2018.
99.2    Investor Presentation
99.3    Employee Communication


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

   DCT INDUSTRIAL TRUST INC.
Date: April 30, 2018   

/s/ John G. Spiegleman

   John G. Spiegleman
   Executive Vice President and General Counsel

 

   DCT INDUSTRIAL OPERATING PARTNERSHIP LP
   By: DCT Industrial Trust Inc., its general partner
Date: April 30, 2018   

/s/ John G. Spiegleman

   John G. Spiegleman
   Executive Vice President and General Counsel
(Back To Top)

Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO    LOGO

FOR IMMEDIATE RELEASE

Prologis to Acquire DCT Industrial Trust for $8.4 Billion

Deepens presence in core, high-growth U.S. markets

Annual stabilized core funds from operations* expected to increase $0.06-$0.08 per share

SAN FRANCISCO and DENVER, April 29, 2018 — Prologis, Inc. (NYSE: PLD) and DCT Industrial Trust Inc. (NYSE: DCT) today announced that the two companies have entered into a definitive merger agreement by which Prologis will acquire DCT for $8.4 billion in a stock-for-stock transaction, including the assumption of debt. The boards of directors of both companies have unanimously approved the transaction.

“For some time, we have considered DCT’s realigned portfolio to be the most complementary to our own in terms of product quality, market position and growth potential,” said Prologis chairman and chief executive officer Hamid R. Moghadam. “This high level of strategic fit will allow us to capture significant scale economies immediately. In addition, our current platform initiatives, particularly in the areas of advanced analytics, customer experience and procurement and ancillary revenues, will enable us to extract significant upside from the combined portfolios.”

The 71 million square foot operating portfolio deepens Prologis’ presence in high-growth markets including Southern California, the San Francisco Bay Area, New York/New Jersey, Seattle and South Florida. The acquisition also includes:

 

    7.1 million square feet of development, redevelopment and value-added projects

 

    195 acres of land in pre-development, predominantly in Seattle, Atlanta, South Florida and Southern California with build-out potential of over 2.9 million square feet

 

    215 acres of land under contract or option, predominately in New York/New Jersey, Southern California, Northern California and Chicago, with a build-out potential of over 3.3 million square feet

“This transaction underscores the exceptional quality of DCT’s portfolio, platform and customer relationships, which our talented team has worked hard to create,” said DCT Industrial president and chief executive officer Philip L. Hawkins. “Our shared commitment to quality, exceeding expectations and enhancing customer experience makes this a perfect combination.”

“DCT’s team is as good as it gets, and we expect a number to join us to help manage the portfolio, execute on capital deployment activities and make long-term contributions to the Prologis platform,” said Prologis chief executive officer for the Americas Eugene F. Reilly. “This deal also diversifies our customer roster through the addition of some 500 new relationships.”

The transaction is anticipated to create substantial synergies, including near-term synergies of approximately $80 million in corporate general and administrative cost savings, operating leverage, interest expense and lease adjustments, which are forecast to increase annual stabilized core funds from operations* (Core FFO) per share by $0.06-$0.08. A combination of revenue synergies and incremental development volume has the potential to generate $40 million of additional annual revenue and development profit in the future.


“This all-stock transaction enables us to maintain our strong balance sheet and significant financial flexibility,” said Prologis chief financial officer Thomas S. Olinger. “In addition, the transaction increases our U.S. dollar net equity and drives additional core FFO growth.”

Under the terms of the agreement, DCT shareholders will receive 1.02 Prologis shares for each DCT share they own. The transaction, which is currently expected to close in the third quarter of 2018, is subject to the approval of DCT stockholders and other customary closing conditions. At closing, it is anticipated that Philip L. Hawkins will join the Prologis board of directors.

J.P. Morgan is acting as exclusive financial advisor and Mayer Brown LLP is serving as legal advisor to Prologis. BofA Merrill Lynch is acting as exclusive financial advisor and Goodwin Procter LLP is serving as legal advisor to DCT.

Webcast & Conference Call Information

Prologis and DCT will host a webcast and conference call tomorrow to discuss the transaction. Here are the event details:

 

    Monday, April 30, 2018, at 9:00 a.m. U.S. Eastern time.

 

    Live webcast at http://ir.Prologis.com by clicking Investors>Investor Events and Presentations.

 

    Live webcast at http://investors.dctindustrial.com/CorporateProfile.

 

    Dial in: +1 (866) 393-4306 or +1 (734) 385-2616 and enter Passcode 4794005.

A telephonic replay will be available April 30 to May 7 at +1 (855) 859-2056 (from the United States and Canada) or +1 (404) 537-3406 (from all other countries) using conference code 4794005. The webcast replay will be posted when available in the Investor Relations “Events & Presentations” section at www.prologis.com. The replay will also be available in the Investor Relations section of DCT’s website at www.investors.dctindustrial.com/Corporate Profile.

About Prologis

Prologis, Inc. is the global leader in logistics real estate with a focus on high-barrier, high-growth markets. As of March 31, 2018, the company owned or had investments in, on a wholly owned basis or through co-investment ventures, properties and development projects expected to total approximately 683 million square feet (63 million square meters) in 19 countries. Prologis leases modern distribution facilities to a diverse base of approximately 5,000 customers across two major categories: business-to-business and retail/online fulfillment.

About DCT®

DCT is a leading logistics real estate company specializing in the ownership, development, acquisition, leasing and management of bulk-distribution and light-industrial properties in high-demand distribution markets in the United States. DCT’s actively managed portfolio is strategically located near population centers and well-positioned to take advantage of market dynamics. As of March 31, 2018, the company owned interests in approximately 73.7 million square feet of properties leased to approximately 840 customers. DCT maintains a Baa2 rating from Moody’s Investors Service and a BBB from S&P Global Ratings. Additional information is available at www.DCTindustrial.com.

 

2


CONTACTS:

Prologis:

Investors: Tracy Ward, Tel: +1 415 733 9565, tward@prologis.com, San Francisco

Media: Jason Golz, Tel: +1 415 733 9439, jgolz@prologis.com, San Francisco

DCT:

Investors/Media: Melissa Sachs, Tel: +1 303 597 1550, investorrelations@dctindustrial.com, Denver

Additional Information

In connection with the proposed transaction, Prologis will file a registration statement on Form S-4, which will include a document that serves as a prospectus of Prologis and a proxy statement of DCT (the “proxy statement/prospectus”), and each party will file other documents regarding the proposed transaction with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A definitive proxy statement/prospectus will be sent to DCT’s shareholders. Investors and security holders will be able to obtain the registration statement and the proxy statement/prospectus free of charge from the SEC’s website or from Prologis or DCT. The documents filed by Prologis with the SEC may be obtained free of charge at Prologis’ website at the Investor Relations section of www.ir.prologis.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Prologis by requesting them from Investor Relations by mail at Pier 1, Bay 1, San Francisco, CA 94111 or by telephone at 415-394-9000. The documents filed by DCT with the SEC may be obtained free of charge at DCT’s website at the Investor Relations section of http://investors.dctindustrial.com/CorporateProfile or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from DCT by requesting them by mail from Investor Relations, 555 17th Street, Suite 3700, Denver, CO 80202, or by telephone at 303-597-1550.

Participants in the Solicitation

Prologis and DCT and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about Prologis’ directors and executive officers is available in Prologis’ Annual Report on Form10-K for the fiscal year ended December 31, 2017, and in its proxy statement dated March 22, 2018, for its 2018 Annual Meeting of Shareholders. Information about DCT’s directors and executive officers is available in DCT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and in its proxy statement dated March 21, 2018, for its 2018 Annual Meeting of Shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the transaction when they become available. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Prologis or DCT as indicated above.

 

3


Cautionary Statement Regarding Forward-looking Statements

The statements in this communication that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which Prologis, Inc. (“Prologis”) and DCT Inc. (“DCT”) operate as well as beliefs and assumptions of management of Prologis and management of DCT. Such statements involve uncertainties that could significantly impact financial results of Prologis or DCT. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” and “estimates” including variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that Prologis or DCT expect or anticipate will occur in the future—including statements relating to rent and occupancy growth, development activity, contribution and disposition activity, general conditions in the geographic areas where Prologis and DCT operate, debt, capital structure and financial position, Prologis’ ability to form newco-investment ventures and the availability of capital in existing or newco-investment ventures—are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) national, international, regional and local economic and political climates; (ii) changes in global financial markets, interest rates and foreign currency exchange rates; (iii) increased or unanticipated competition for our properties; (iv) risks associated with acquisitions, dispositions and development of properties; (v) maintenance of REIT status, tax structuring and changes in income tax laws and rates; (vi) availability of financing and capital, the levels of debt that we maintain and our credit ratings; (vii) risks related to our investments in our co-investment ventures, including our ability to establish newco-investment ventures; (viii) risks of doing business internationally, including currency risks; (ix) environmental uncertainties, including risks of natural disasters; (x) risks associated with achieving expected revenue synergies or cost savings; (xi) risks associated with the ability to consummate the merger and the timing of the closing of the merger and (xii) those additional risks and factors discussed in the reports filed with the Securities and Exchange Commission (“SEC”) by Prologis and DCT from time to time, including those discussed under the heading “Risk Factors” in the irrespective most recently filed reports on Form 10-K and 10-Q. Neither Prologis nor DCT undertakes any duty to update any forward-looking statements appearing in this communication except as may be required by law.

 

4


This communication shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

 

* This is a non-GAAP financial measure. Because of the impact of non-cash real estate depreciation, Prologis expects the acquisition to be dilutive to net earnings. See our First Quarter 2018 Supplemental Information Report for our definition of Core FFO.

 

5

(Back To Top)

Section 3: EX-99.2 (EX-99.2)

EX-99.2

Exhibit 99.2

 

LOGO

April 30, 2018 Prologis and DCT Industrial Merger Conference Call Exhibit 99.2


LOGO

Important Information This presentation includes certain terms and non-GAAP financial measures that are not specifically defined herein. These terms and financial measures are defined and, in the case of the non-GAAP financial measures, reconciled to the most directly comparable GAAP measure, in Prologis’s and DCT’s first quarter Earnings Release and Supplemental Information that are available on Prologis’s investor relations website at www.ir.prologis.com, DCT’s investor relations website at http://investors.dctindustrial.com and on the SEC’s website at www.sec.gov. Amounts in the presentation for Prologis and Prologis Combined are determined in accordance with Prologis’s methodology and amounts for DCT are determined in accordance with DCT’s methodology. The statements in this document that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which Prologis, Inc. (“Prologis”) and DCT Inc. (“DCT”) operate as well as beliefs and assumptions of management of Prologis and management of DCT. Such statements involve uncertainties that could significantly impact financial results of Prologis or DCT. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” and “estimates” including variations of such words and similar expressions are intended to identify such forward-looking statements, which generally are not historical in nature. All statements that address operating performance, events or developments that Prologis or DCT expect or anticipate will occur in the future —including statements relating to rent and occupancy growth, development activity, contribution and disposition activity, general conditions in the geographic areas where Prologis and DCT operate, debt, capital structure and financial position, Prologis’s ability to form new co-investment ventures and the availability of capital in existing or new co-investment ventures — are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Some of the factors that may affect outcomes and results include, but are not limited to: (i) national, international, regional and local economic and political climates; (ii) changes in global financial markets, interest rates and foreign currency exchange rates; (iii) increased or unanticipated competition for our properties; (iv) risks associated with acquisitions, dispositions and development of properties; (v) maintenance of REIT status, tax structuring and changes in income tax laws and rates; (vi) availability of financing and capital, the levels of debt that we maintain and our credit ratings; (vii) risks related to our investments in our co-investment ventures, including our ability to establish new co-investment ventures; (viii) risks of doing business internationally, including currency risks; (ix) environmental uncertainties, including risks of natural disasters; (x) risks associated with achieving expected revenue synergies or cost savings; (xi) risks associated it the ability to consummate the merger and the timing of the closing of the merger and (xii) those additional risks and factors discussed in the reports filed with the Securities and Exchange Commission (“SEC”) by Prologis and DCT from time to time, including those discussed under the heading “Risk Factors” in their respective most recently filed reports on Form 10-K and 10-Q. Neither Prologis nor DCT undertakes any duty to update any forward-looking statements appearing in this document except as may be required by law. Additional Information In connection with the proposed transaction, Prologis will file a registration statement on Form S-4, which will include a document that serves as a prospectus of Prologis and a proxy statement of DCT (the “proxy statement/prospectus”), and each party will file other documents regarding the proposed transaction with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A definitive proxy statement/prospectus will be sent to DCT’s shareholders. Investors and security holders will be able to obtain the registration statement and the proxy statement/prospectus free of charge from the SEC’s website or from Prologis or DCT. The documents filed by Prologis with the SEC may be obtained free of charge at the Investor Relations section of Prologis’s website at www.ir.prologis.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Prologis by requesting them from Investor Relations by mail at Pier 1, Bay 1 San Francisco, CA 94111 or by telephone at 415-394-9000. The documents filed by DCT with the SEC may be obtained free of charge at DCT’s website at the Investor Relations section of http:/investors.dctindustrial.com/Corporate Profile or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from DCT by requesting them from Investor Relations by mail at 555 17th Street, Suite 3700 Denver, CO 80202, or by telephone at 303-597-1550. Participants in the Solicitation Prologis and DCT and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about Prologis’s directors and executive officers is available in Prologis’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in its proxy statement dated March 22, 2018, for its 2018 Annual Meeting of Shareholders. Information about DCT’s directors and executive officers is available in DCT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in its proxy statement dated March 21, 2018, for its 2018 Annual Meeting of Shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the transaction when they become available. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Prologis or DCT as indicated above. This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended. 2


LOGO

Transaction Overview • 100% stock acquisition by Prologis, Inc. (“Prologis”) (NYSE: PLD) of DCT Industrial Trust Transaction Details Inc. (“DCT”) (NYSE: DCT) ? 1.02x fixed exchange ratio (1.02 shares of Prologis issued for each DCT share) ? Pro forma ownership of ~85% Prologis / ~15% DCT Board Composition Board Composition ?11 existing directors from Prologis and Management ?Phil Hawkins is expected to join from DCT All Prologis executives maintain existing management positions Accretion & Increases forecasted annual run-rate Core FFO* per share by $0.06-$0.08 or 2-3%(1) Dividend Prologis expects to maintain 2018 annual dividend of $1.92 per share Closing Timing & Expected close in Q3 2018 Conditions Subject to customary closing conditions, including DCT shareholder approval * This is a non-GAAP financial measure 1. Due to the impact of non-cash real estate depreciation, Prologis expects the acquisition to be dilutive to net earnings. See Prologis’s First Quarter 2018 Supplemental Information Report for our definition of Core FFO 3


LOGO

Strategic Rationale and Transaction Benefits • 100% overlap with Prologis markets • 71 MSF operating portfolio located in major U.S. distribution markets Strategic Fit • Development in process and value-added projects totaling 7.1 MSF(1) as well as 195 acres of land in pre-development and 215 acres of land under contract or option(2) • Expect to dispose of ~$550M, or less than 7% of the portfolio Platform • Expands relationships with existing customers and adds ~500 new customers Benefits • Creates additional economies of scale opportunities Day-one: • $80M in corporate G&A savings, operating leverage, interest savings and lease adjustments Synergies Future: • $40M of potential annual revenue synergies over time and expanded development value creation opportunities Accretion • Increases forecasted annual run-rate Core FFO* per share by $0.06-$0.08 or 2-3% • Maintain significant liquidity and financial capacity Balance Sheet Implications • Expect to hold A3/A- ratings from Moody’s and S&P • Raises percentage of USD net equity to 97% from 96% * This is a non-GAAP financial measure 1. Based on DCT development projects in lease-up, development projects under construction, value-added projects, leased pre-development and redevelopment properties as of March 31, 2018 2. As of March 31, 2018 4


LOGO

DCT Industrial Trust Inc. (1) Indianapolis Company Overview Seattle 0.8MSF 4.1MSF • Publicly-traded logistics REIT with an equity m Chicago Cincinnati Denver 3.7MSF Pennsylvania cap of $5.5B and AUM of $7.3B 9.4MSF 1.7MSF 3.0MSF • 71 MSF operating portfolio, well-located in maj New Jersey U.S. distribution markets 1.3MSF Northern Baltimore / D.C. • 32 development and value-add projects totali California 2.2MSF 4.3MSF MSF to be delivered over the next 6 months(2) Southern Dallas Nashville California 6.5MSF 3.1MSF Atlanta • 195 acres of land in pre-development with an 12.2MSF 7.9MSF estimated build-out potential of 2.9 MSF Phoenix Orlando 2.0MSF 2.6MSF Houston • 215 acres of land under contract or option with 4.5MSF Miami estimated build-out potential of more than 3.3 1.6MSF Operating Portfolio(3) Select Logistics REITs(4) Square Feet, Millions 800 761 Southern California 17% West East 600 39% 29% Chicago 11% 400 Atlanta 9% 200 149 110 78 64 45 Houston 9% Central 0 Northern California 9% 32% Prologis DCT DRE LPT FR EGP 1. Based on DCT as of March 31, 2018; AUM based on total enterprise value; Map based on total operating square feet as of March 31, 2018 2. Represents development projects in lease-up, development projects under construction, leased pre-development, value-add acquisitions and redevelopment properties as of March 31, 2018; includes one expansion project (2560 White Oak Expansion) 3. Based on DCT NOI (straight-line basis) as of March 31, 2018 4. Total MSF includes operating portfolio, redevelopment, development, value-add acquisitions and joint ventures; Represents Prologis total owned and managed MSF as of March 31, 2018 and DCT total MSF as of March 31, 2018; Eastgroup Properties (EGP), Duke Realty (DRE), First Industrial Realty Trust (FR), and Liberty Property Trust (LPT) data as of March 31, 2018 5


LOGO

Strategic Fit Legend 75 MSF 35 MSF 15 MSF DCT(1) Prologis(1) U.S. Operating Portfolio Overview(2) Top U.S. Markets by % of NOI(3) 23% Prologis DCT Combined Portfolio size (MSF) 353 71 424 10% 10% 8% 6% 5% Number of buildings 1,977 414 2,391 Occupancy (%) 97.2% 97.9% 97.3% Southern NY / NJ San Francisco Chicago Dallas Seattle California 1. Prologis and DCT portfolio data as of March 31, 2018. Scaling is proportionate to the size of square feet for the combined portfolio 2. Prologis portfolio metrics based on U.S. owned and managed operating portfolio as of March 31, 2018 and DCT portfolio metrics based on operating portfolio as of March 31, 2018 3. Prologis pro rata share of net effective NOI as of March 31, 2018 and DCT NOI (straight-line basis) as of March 31, 2018 6


LOGO

Complementary Portfolios San Francisco Bay Area – Brisbane, CA Prologis DCT 7


LOGO

Complementary Portfolios Seattle – Sumner, WA    Prologis DCT 8


LOGO

Complementary Portfolios Miami – Beacon Lakes, FL    Prologis DCT 9


LOGO

Platform Benefits Top Customers by Rent(1) • Acquisition of high-quality, 3.1% well-located assets to better serve customer needs 1.4% • Significant overlap with 1.3% existing customer base, 1.2% expanding relationships for future growth 1.1% 1.0% • Further diversifies relationships with ~500 new customers 1.0% • Adds to the base of $1.3T(2) in 0.9% annual global economic activity 0.8% flowing through Prologis logistics facilities 0.7% Prologis DCT 1. Based on net effective rent on an owned and managed basis for Prologis as of March 31, 2018 and annualized base rent for DCT as of March 31, 2018 2. Oxford Economics, Prologis Research 10


LOGO

Synergies and Accretion Estimated Annual Timing Category Run–Rate Amount Corporate G&A Savings $30M Operating Leverage $7M • Scaling property management and leasing capabilities Day One $80M Interest Expense $36M • Debt mark-to-market utilizing Prologis’s cost of capital advantage Lease Adjustments $7M • Fair-value adjustments and straight-line rent reset of DCT’s portfolio $0.06-$0.08 or 2-3% increase in estimated annual Core FFO* per share Future Annual Revenue Synergies $15M Potential $40M Expanded Annual Development Value Creation Potential $25M * This is a non-GAAP financial measure 11


LOGO

Balance Sheet Implications(1) As of 3/31/18 Prologis DCT Combined • Expect to lower the Total shares and units(2) 549.0 97.3 648.2 cost of debt through Equity market capitalization $34,581 $5,483 $40,833 refinancing activity Debt at company share 11,531 1,802 13,333 Preferred equity 69—69 • Reduces G&A as a % of AUM by 12% Total market capitalization $46,181 $7,284 $54,235 to 43 bps Debt / Adjusted EBITDA(3) 4.2x 5.6x 4.3x Fixed charge coverage ratio 7.7x 4.2x 7.4x • Improves USD net Total debt as a % of total market equity 24% 25% 24% capitalization Credit ratings A3/A- Baa2/BBB A3/A-(4) • Normalizing leverage G&A as a % of AUM(5) 49 bps 63 bps 43 bps will be a catalyst for % of USD net equity(6) 96% 100% 97% future growth Source: Market prices as of 3/31/18 1. This is a non-GAAP financial measure, please refer to “Important Information” for calculation methodology 2. Based on assumed combined share count of 648.2 million, which is 99.8 million shares from Prologis issued to DCT shareholders (based on 97.3 million shares including the vesting of equity awards at a 1.02x exchange ratio); Prologis and DCT share count detail as of March 31, 2018; Prologis share count of 549.0 million includes basic shares, vested stock awards and partnership units, but excludes unvested stock awards and LTIP OP units 3. Pro forma EBITDA includes the impact of G&A and property management synergies but excludes any potential purchase accounting and revenue synergies 4. Expected to maintain Prologis credit ratings. Note: a credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time 5. For Prologis based on total owned and managed AUM (and includes strategic capital G&A) as of March 31, 2018 and for DCT based on total book value as of March 31, 2018; Prologis combined G&A includes the impact of G&A synergies 6. Mexico is included in the U.S. as it is dollar functional 12


LOGO

(Back To Top)

Section 4: EX-99.3 (EX-99.3)

EX-99.3

Exhibit 99.3

On April 29, 2018, Mr. Philip Hawkins, President and Chief Executive Officer of DCT Industrial Trust Inc., circulated the below email to all employees of DCT Industrial Trust Inc.:

DCT:

This afternoon, DCT and Prologis issued a joint press release announcing that the two companies have entered into an agreement to merge.    This occurred after careful consideration by our Board and upon a unanimous vote earlier today to approve the merger. A copy of the press release is attached.

This is certainly news that will take some time for you to process and digest. While the merger agreement has been executed by both companies, many steps need to be taken, including having a DCT shareholder vote, before the merger will close. Right now, we anticipate the closing will take place sometime in the third quarter of 2018.

From my point of view, two of the primary reasons we decided to merge DCT into Prologis are (1) the two companies are a great strategic fit given the strong overlap in our U.S. markets, portfolio quality and development focus which enhances the value and strength of the merged company and (2) based on Friday’s closing stock price, DCT shares are currently valued at $67.91 per share, a 15.6% premium to our current share price as each DCT share will be converted into 1.02 shares of Prologis stock.

The most important question on your minds is how does this impact you individually? For now, nothing will change regarding your job and responsibilities. When this proposed merger does close, Prologis’ senior management team will lead the combined company. Prologis is eager to begin discussing employment opportunities going forward. But, to give you a little bit of space between this announcement and those discussions, I have asked them to wait until later in the week. Final organizational plans will be developed over the next couple of months, before closing.

At the closing of the merger:

 

    All employees will receive their 2018 bonus, prorated to the closing date.

 

    All unvested equity grants will immediately vest, regardless of whether you are retained by Prologis, and you will receive 1.02 Prologis shares for each of your DCT shares.

In addition, for the benefit of those individuals not retained by Prologis, we have adopted a severance program. More specific details will be communicated to you as decisions are made about the organization, but in general, anyone terminated within 12 months after the merger will be entitled to receive the following benefits:

 

    Cash severance equal to one-month salary AND bonus for every year of service – with a minimum of 6 months and a maximum of 12 months.    Partial years of service will also count on a prorated basis (i.e., if you worked at DCT for 7 and a half years, you would be entitled to 7 and a half months of salary AND bonus upon termination),

 

    Continuing health, dental and vision coverage and HSA contributions paid for by the company for six months.

For both of the bonuses described above, they will be determined based on the higher of the average of your last two years’ actual payments or your current target.


We will count on all of you over the coming months to ensure that DCT continues to perform at a high level and is well prepared to enter the next stage of its existence as part of Prologis. Our severance program is intended to provide appropriately generous protection for all of you who help get us to the finish line, and we are happy to make it available to you.

A joint DCT / Prologis conference call with investors and analysts will be held tomorrow morning at 7:00 a.m. Mountain time. The dial-in for the call is included in the attached press release and you are welcome to listen in.    

We will have a DCT Company call at 10:00 a.m. Mountain time tomorrow (Monday) where I will provide some additional detail and context regarding the merger. An Outlook calendar invitation will be sent out shortly with the dial-in information.

I understand the impact of this decision on each of you and you will no doubt have many questions about all of this. I am available as are the other members of the Executive Committee and Liz Andora to answer them as best we can. I can assure you this was not an easy decision for me to make, because of how this will impact all of you. The next few months will be difficult as we juggle both our job duties as well as personal and professional change, but I am confident that the DCT team will continue to perform at our best and finish our careers at DCT with the pride we have all demonstrated throughout the Company’s history.

I look forward to talking with you on the call and frequently during the transition process.

Phil

Additional Information

This document contains forward-looking statements that are based on current expectations, estimates and projections about the industry and markets in which Prologis, Inc. (“Prologis”) and DCT Industrial Trust Inc. (“DCT”) operate as well as beliefs and assumptions of management of Prologis and management of DCT. Such statements involve uncertainties that could significantly impact financial results of Prologis or DCT. All statements that address operating performance, events or developments that Prologis or DCT expect or anticipate will occur in the future are forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. We can give no assurance that our expectations will be attained, and therefore actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. Neither Prologis nor DCT undertakes any duty to update any forward-looking statements appearing in this document except as may be required by law.

In connection with the proposed transaction, Prologis will file a registration statement on Form S-4, which will include a document that serves as a prospectus of Prologis and a proxy statement of DCT (the “proxy statement/prospectus”), and each party will file other documents regarding the proposed transaction with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A definitive proxy statement/prospectus will be sent to DCT’s shareholders. Investors and security holders will be able to obtain the registration statement and the proxy statement/prospectus free of charge from the SEC’s website or from Prologis or DCT. The documents filed by Prologis with the SEC may


be obtained free of charge at Prologis’s website at www.Prologis.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Prologis by requesting them by mail at Pier 1, Bay 1, San Francisco, CA 94111 or by telephone at (415) 394-9000. The documents filed by DCT with the SEC may be obtained free of charge at DCT’s website at www.dctindustrial.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from DCT by requesting them by mail at Investor Relations, 555 17th Street, Suite 3700, Denver, CO 80202 or by telephone at 303-597-1550.

Participants in the Solicitation

Prologis and DCT and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information about Prologis’s directors and executive officers is available in Prologis’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in its proxy statement dated March 22, 2018, for its 2018 Annual Meeting of Shareholders. Information about DCT’s directors and executive officers is available in DCT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 and in its proxy statement dated March 21, 2018, for its 2018 Annual Meeting of Shareholders. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the transaction when they become available. Investors should read the proxy statement/prospectus carefully when it becomes available before making any voting or investment decisions. You may obtain free copies of these documents from Prologis or DCT as indicated above.

This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.

(Back To Top)