CHICAGO—Ventas Inc. said Monday it had agreed to acquire Ardent Health Services, one of the nation's 10 largest for-profit hospital operators, for $1.75 billion. Separately, the healthcare REIT announced that its board had approved the spinoff of most of its post-acute care/skilled nursing facility portfolio into a separate, publicly traded company.
VTR's CEO, Debra A. Cafaro, says the addition of Ardent's platform, including “high-quality assets with significant market share in three key markets” as well as “a highly-regarded hospital management team,” creates “a strong avenue for growth in the attractive hospital real estate market.” The acquisition will also increase VTR's diversification by property type and operator.
Concurrent with the closing of the transaction, VTR plans to separate Ardent Health Services' hospital operations from its owned real estate and sell the hospital operations to one or more newly formed entities owned by Ardent's current management, with VTR taking a stake of up to 9.9%. VTR and Ardent will enter into pre-agreed long-term triple-net leases with an expected going in cash yield exceeding 7% and annual escalators estimated at 2.5%.
Currently known simply as SpinCo, the SNF spinoff will own 355 triple-net leased SNFs and other healthcare assets in 37 states, operated by 44 private regional and local care providers. The newly formed REIT will have an independent, experienced management team and strategy focused on its pure-play post-acute/skilled nursing business.
"Over the past 15 years, Ventas has delivered 29% compound annual return to shareholders,” Cafaro says. “This transaction demonstrates our continued commitment to enhancing shareholder value by creating two focused companies with distinct strategies.” GlobeSt.com will provide more information on both VTR transactions this afternoon.
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