Ventas and EGI Ink Deal for $475M Ardent

CHICAGO, NASHVILLE—Earlier this spring, Ventas Inc. said it had agreed to acquire Ardent Health Services, one of the nation's 10 largest for-profit hospital operators, for $1.75 billion and would retain the owned real estate while spinning off its hospital operations. And the trust has just signed an agreement with Equity Group Investments that gives it a majority stake in AHS's hospital operations, now called just Ardent, with Ventas retaining a 9.9% interest, and current AHS management holding a significant ownership stake.

Ventas and EGI set Nashville-based Ardent's value at approximately $475 million. The companies expect the deal will close in the third quarter of 2015, and Ventas and Ardent will enter into pre-agreed, long-term, triple-net leases with initial annual base rent of $105 million. Ventas officials say they expect to receive a $900 million five-year unsecured bank loan to finance a portion of its real estate investment.

“We are delighted to partner with EGI and Ardent's management in this transaction,” said Ventas chairman and chief executive officer Debra A. Cafaro. “With Ardent, we are well positioned to grow in the large, fragmented and rapidly consolidating $1 trillion domestic hospital segment. We believe that hospitals will continue to be at the core of the healthcare delivery system, supported by attractive demographics, policy and an improving economy, which we expect will expand the ranks of insured individuals and improve provider revenues.”

“With these strong partners of EGI and Ventas, we believe we can build upon our success and provide additional capital to our facilities and expand into new service areas,” says David T. Vandewater, president and chief executive officer of Ardent. “This new partnership will be a significant benefit to hospitals, health systems and communities across the country.”

Ardent's management team, including Vandewater, will continue to lead the company, which generates about $2 billion in annual net revenues and provides healthcare services in three key service areas: Amarillo, TX; Tulsa, OK; and Albuquerque, NM. The portfolio includes 14 hospitals and three multi-specialty physician groups. Ardent will keep its headquarters in Nashville and won't change its current operations.