Merger Deal Leads to $1.4B Acute Care Sale

Sr. Luke’s Medical Center (pictured) and St. Luke’s Behavioral Health Center, both in Phoenix, are part of the IASIS portfolio.

BIRMINGHAM, AL—One portfolio sale, two billion-dollar transactions. Medical Properties Trust Inc., headquartered here, said Friday it had agreed to pay $1.4 billion for 10 acute care hospitals and one behavioral health facility now operated by IASIS Healthcare and to be operated by Steward Health Care System LLC when the transaction is completed. The sale is contingent upon the completion of a merger between IASIS and Steward, also announced Friday. Financial terms of the merger were not disclosed; however, Bloomberg Business and the Wall Street Journal put its value at about $2 billion.

In an investor presentation Friday, MPT noted that the IASIS deal—a $700-million sale-leaseback and a $700-million mortgage investment—increases acute care hospitals’ share of its total portfolio to 72.5%, a level that rises to 84% for the REIT’s US portfolio. At the same time, it increases the Steward-operated concentration in MPT’s portfolio, following a $1.25-billion deal for nine acute care facilities in Seward’s home state of Massachusetts this past fall.