Ventas Inc. announced Monday morning that it will be purchasing Nationwide Health Properties Inc. (NHP) in a $7.4-billion stock deal that will create the nation’s largest health care real estate investment trust (REIT). The combined entity will have more than 1,300 properties in 47 states, the District of Columbia and two Canadian provinces with 643 senior housing facilities and 379 skilled nursing facilities. According to Ventas, senior housing will account for almost 55% of the combined NOI and skilled nursing will account for 22% and that private pay sources will represent 70% of the combined $1.3 billion in net operating income. The purchase is expected to close in the third quarter of 2011 and upon the close of the transaction, Ventas shareholders will own approximately 65% of the combined entity with NHP shareholders owning the balance.
“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 Chairman and Chief Executive Officer Debra A. Cafaro said. “With Ventas’s successful track record of value-creating transactions and NHP’s longstanding history of regional, asset-level acquisitions, taken together with one of the strongest balance sheets in the REIT industry, the combined company will have a unique opportunity for continued external growth. We are excited to move forward with the NHP team. This combination unites two similar cultures that share core values and a strong track record of delivering superior returns to shareholders.”
Ventas’s CEO Cafaro will continue as Chairman and CEO of the combined company with NHP Chairman, President and CEO Douglas M. Pasquale serving as a senior adviser during the transition. After the purchase is complete, Ventas will expand its board to 13 members and add Pasquale and two NHP directors to the board.
“For NHP shareholders, Ventas is the right partner, bringing the right value at the right time. After 25 wonderful years of growth and success, we look forward to joining forces with Ventas, which shares our legacy of financial strength and top-tier returns for shareholders,” said Douglas M. Pasquale, NHP’s Chairman, President and Chief Executive Officer. “Our shareholders, property operators and tenants will all benefit from our expanded strength, diversification and capabilities. 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. I am personally committed to ensuring a smooth transition and the completion of the transaction as expeditiously as possible.”
Separately, NHP announced its fourth quarter earnings that saw a 14% rise in profit to $35.3 million, up from $30.9 million in Q4 2009 with revenues rising 20% to $116.7 million.