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TORONTO-The Reichmann family has sold 67 healthcare and housing properties to Ventas for $649 million. The move effectively scuppers plans announced in April to float the bundled assets on the Toronto Stock Exchange.

The properties are located in 16 states and include five properties in southern California, 19 United Rehab properties mainly in Kentucky, eight Elmcroft assisted-living communities in the Southeast and 33 Outlook Pointe assisted-living properties in the mid-Atlantic region.After completion of the deal, Ventas will lease the properties to Senior Care Inc. subsidiaries under a 15-year agreement with two five-year extensions.

The deal will add about $50 million in annual rent to the Ventas rental income. Ventas will use a combination of cash and equity to fund the deal. The company will issue about 1.7 million common shares worth about $65 million to the Reichmann family at the close of the deal. The cash portion of the purchase price will be funded through the assumption of up to $30 million of existing secured debt as well as with borrowings from Ventas' credit line and expected debt issues.

The deal effectively terminates plans by Reichmann International Development Corp. to float the bundled assets on the Toronto Stock Exchange. Senior Care REIT filed an initial prospectus in April for a public offering, but according to a Dow Jones report Thursday, plans to float the new entity were put on hold once Ventas emerged as a prospective bidder.

"This acquisition exemplifies the continued execution of our strategic growth and diversification plan," says Debra A. Cafaro, Ventas chairman, president and chief executive, in the statement. "In one step, we are adding an important new tenant relationship, acquiring a diverse portfolio of assets with a large component of private pay revenues and continuing our commitment to strong internal growth from rental escalations," she says.

Instant Insights /

Reichmann Sells Healthcare Package for $649M

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