Ventas to acquire Nationwide Health Properties
Ventas, a Chicago-based real estate investment trust with more than 700 assets in 44 states, is acquiring Nationwide Health Properties, which has more than 650 properties in its portfolio.
Under terms of the agreement, Ventas will acquire all outstanding shares of NHP in a stock-for-stock transaction valued at $7.4 billion.
The acquisition will result in the creation of one of the largest publicly traded REITs, with pro forma equity value of about $17 billion and pro forma enterprise value of about $23 billion.
“The combination of Ventas and NHP increases the scale and diversification of the combined company, the strength and flexibility of the company’s balance sheet and the quality and geography of the assets,” Ventas officials said in announcing the acquisition. “This combination unites two similar cultures that share core values and a strong track record of delivering superior returns to shareholders.”
“Our shareholders, property operators and tenants will all benefit from our expanded strength, diversification and capabilities,” said Douglas M. Pasquale, NHP’s chairperson, president and chief executive officer, in a statement. “We’re pleased that this all-stock transaction offers NHP shareholders a premium and also the opportunity to participate in the combined company’s future prospects for dividends and growth.”
The transaction is expected to close in the third quarter of this year, at which time Ventas shareholders will own approximately 65 percent of the combined company.
The transaction is expected to be tax-free for shareholders and will be immediately accretive to Ventas’ normalized Funds From Operations and Funds Available for Distribution after the closing, according to officials.
NHP shareholders will get a fixed exchange ratio of 0.7866 Ventas shares for each share of NHP common stock they own. Based on Ventas’ closing stock price on February 25, NHP shareholders would get a premium of approximately 15 percent over NHP’s stock price from the same day.
Debra A. Cafaro, Ventas’ chairperson and chief executive officer, will retain those positions under the combined company, while Pasquale will be a senior advisor. Once the transaction closes, the company’s headquarters will be in Chicago and its board of directors will be expanded to 13 members to include three members – including Pasquale – from NHP.
