German Health Portfolio Trades for $900M

BERLIN—US-based Medical Properties Trust, Inc. says it has entered into definitive agreements to acquire and lease back substantially all of the real estate assets of privately-held MEDIAN Kliniken Group, the largest private provider of post-acute and acute rehabilitation services in Germany. The deal is worth about $900 million (€705M).

“This transaction further demonstrates MPT's success in leveraging its deep understanding of the healthcare markets and continues its track record of completing highly accretive investments across diverse geographies,” said Edward Aldag, chairman, president and CEO of Medical Properties Trust. “This is an important transaction because it significantly increases our asset base to approximately $4.5 billion, and builds on our recent entry into the attractive Western European market. The acquisition of the MEDIAN real estate is a very compelling and unique opportunity for MPT and is fully aligned with our strategy to diversify our market-leading hospital portfolio across geography, operator and facility type.”

Under the terms of the sale/leaseback agreement, MPT will acquire from and leaseback to MEDIAN the real estate assets of 38 rehabilitation and 2 acute care hospitals throughout Germany pursuant to a 27 year master lease that provides an initial lease rate well within MPT's 8.0% to 11.0% target range, with annual escalators at the greater of one percent or 70% of German CPI.

In addition to the MEDIAN acquisitions, MPT also announced Monday approximately $155 million in recent, previously undisclosed commitments and investments. These hospital assets include three acute facilities in the United States (located in Alabama, Texas and West Virginia) with an aggregate value of approximately $74 million and three additional German rehabilitation hospitals with an aggregate value of approximately $81 million (based on agreed pricing of €64 million) to be leased to RHM Kliniken, a current tenant of the Company's assets in Germany, and owned by affiliates of Waterland Private Equity, the expected future majority owner of MEDIAN. With these transactions, MPT has committed to investments totaling approximately $1.4 billion year-to-date, the highest amount of investments the Company has made in a single year in its history.

Consistent with MPT's standard agreements, the new U.S. hospital facilities, as well as those included in the new commitment with RHM Kliniken, will be leased back to the operators under long-term net leases with a weighted average initial cash lease rate of approximately 9.3%.

MPT expects to consummate the MEDIAN transaction through a two-step process. All transactions are expected to be completed during the first quarter of 2015.