New York-based Annaly, a mortgage debt REIT, founded Crexus in 2009 via a $200 million initial public offering and still owns 12.4% of the company, meaning its total cash outlay on the deal will be about $872 million.

The deal is valued at $13 per share, a premium of 17.1% over Crexus' share price on Nov. 9 prior to Annaly going public with an offer that was then valued at $12.50 per share.

Annaly has traditionally focused on investing in government-backed mortgage bonds, but since the recession it has sought to diversify into other areas. Crexus, also of New York, is an investor in commercial mortgages, with Annaly managing Crexus' portfolio via a wholly owned subsidiary called Fixed Income Discount Advisory Co.

The deal "represents a significant step towards Annaly's commitment to investing directly in commercial real estate assets," company chairman and CEO Wellington Denahan said in a statement. "We believe that wholly owning the commercial real estate platform we currently manage through FIDAC is complementary to our existing business and return profile and should provide stable and diversified risk-adjusted returns to our shareholders."

The merger agreement includes a 45-day go-shop period, after which time Annaly would commence a cash tender offer for Crexus shares.

Nancy Jo Kuenstner, chairman of a Crexus board special committee that negotiated the transaction, said the group looks "forward to exploring what alternatives might be available to us during the 'go-shop' period, as permitted by the terms of our agreement."

Lazard is acting as financial adviser to Crexus, with Goodwin Procter LLP serving as independent legal adviser to the special committee.

Bank of America Merrill Lynch and K&L Gates LLP are advising Annaly.