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Medalist Diversified REIT, Inc. (NASDAQ:MDRR), a small-cap REIT with a market capitalization of $13.63 million, has finalized the acquisition of a real estate asset in Bowling Green, Kentucky, as disclosed in a recent SEC filing. The transaction, completed on Thursday, involved the purchase of a property located at 2545 Scottsville Road for a total of $2.62 million, excluding closing costs. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 4.06, indicating robust financial flexibility for such acquisitions.
The acquisition was structured as a combination of cash and equity, with Medalist issuing 209,600 operating partnership units valued at around $12.50 each, alongside a cash payment to cover the seller’s transaction costs. The price was set based on an independent appraisal of the property. While the company maintains an impressive gross profit margin of 77.19%, InvestingPro analysis reveals several additional key metrics and insights that could impact investor decisions. Subscribers gain access to over 30 financial metrics and expert analysis.
In conjunction with the acquisition, the seller assigned the rights to the operating partnership units to the BET Trust Dated March 11, 1999. According to the agreement, these units are redeemable for cash or, if the Operating Partnership chooses, shares of Medalist’s common stock on a one-to-one basis. However, the trust is restricted from redeeming the units for common stock without approval from a majority of the company’s stockholders.
The seller’s general partner is Fort Ashford (NYSE:AINC) Funds, LLC, managed by Frank Kavanaugh, who is also the CEO of Medalist Diversified REIT and a trustee of the BET Trust. This connection was disclosed in the filing, highlighting the relationship between the seller and the company’s management.
The issuance of the operating partnership units is exempt from registration under the Securities Act of 1933, per Section 4(a)(2), as they were not offered to the public.
The SEC filing also notes that financial statements for the newly acquired property, as well as pro forma financial information, will be filed in an amendment to the Current Report on Form 8-K by April 5, 2025.
This strategic move expands Medalist Diversified REIT’s portfolio in the real estate sector, specifically within the Bowling Green area. The transaction details, including the First Amendment to Contribution Agreement, are included in the exhibits of the SEC filing, which serves as the basis for this report.
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