Ventas Names SNF Spin-Off, Details Portfolio

The skilled nursing real estate investment trust (REIT) spin-off of Ventas, Inc. (NYSE: VTR) now has a name: Care Capital Properties, Inc. (CCP).

Chicago-based Ventas announced the naming of the new REIT in a Form 10 filing with the U.S. Securities and Exchange Commission Thursday afternoon, just two weeks after the company first said it would spin off its skilled nursing assets into a separate, publicly-traded REIT.

“The filing of the Form 10 is an important step towards successfully completing the strategic, value creating spin-off of our SNF portfolio,” said Ventas Chairman and CEO Debra Cafaro in a written statement. “CCP will be well-positioned as an independent, pure-play SNF REIT with significant growth opportunities.”

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Following its separation from Ventas, CCP will be a newly listed, publicly-traded REIT that will own, acquire and lease SNFs and other health care assets across the United States.

The new REIT’s portfolio will initially consist of 353 high-quality assets operated by 43 private regional and local care providers spread across 37 states, and contain a total of more than 38,000 beds/units.

As part of the Ventas portfolio, the CCP properties had normalized funds from operations of about $259 million for the year ended Dec. 31, 2014, according to the SEC filing. Net operating income for that time period was about $295 million.

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Under the terms of the spin-off, Ventas stockholders are expected to receive one share of CCP common stock via a special distribution for every four shares of Ventas common stock they own. Following the distribution, Ventas’ stockholders will own shares in both Ventas and CCP.

The transaction, which is subject to certain conditions, including final approval and declaration of the distribution by Ventas’ Board of Directors, is expected to be completed in the second half of 2015.

The name Care Capital Properties captures the company’s strategy of providing capital to local and regional post-acute care providers, said Raymond Lewis, CEO of CCP, in a statement.

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“We are pleased with the progress we are making on the spin-off and remain on track to complete the transaction in the second half of this year,” Lewis said. “We are working hard to position Care Capital Partners to capitalize on the attractive investment opportunities in the skilled nursing market.”

The 202-page Form 10 filing summarizes the strategies that CCP intends to pursue to drive growth and create value. In addition to focusing on consolidating smaller SNF operators owning 25 or fewer properties—which generally are too small to attract interest from larger REITs such as Ventas—Care Capital Properties may acquire and invest in health care properties that are complementary to SNFs.

Following separation from Ventas, CCP will be an “emerging growth company,” as defined in the Jumpstart Our Business Startups (JOBS) Act of 2012, according to the Form 10 filing. As such, it will be allowed to provide more limited disclosures and may also take advantage of certain limited exceptions from investors protection laws such as the Sarbanes-Oxley Act of 2002, as amended, and the Investor Protection and Securities Reform Act of 2010, for limited periods.

Written by Jason Oliva

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