In a blockbuster deal involving two of the nation’s leading senior housing financing companies, Capital One Financial Corp. has reached an agreement to acquire GE Capital Healthcare Financial Services for approximately $9 billion, officials announced Tuesday.
The acquisition, slated for completion in the fourth quarter of 2015, grants Capital One approximately $8.5 billion of health care-related loans and GE’s Healthcare Financial Services business, a leading capital provider in the U.S. health care market. The transaction represents a 6% premium to par value of all receivables as of June 30, 2015.
“The combination of these two organizations is going to strengthen our presence not only in senior housing, but across all healthcare financial services,” a Capital One spokesperson told SHN.
In April, GE announced its intentions to sell its GE Capital assets over a two-year period in an effort to return to its industrial roots. When GE Capital Healthcare Financial Services went up for sale in June, the company revealed that it provided more than $10.5 billion in financing to customers in more than 240 transactions in 2014. This represented a 20% increase from 2013. Lending to the senior housing industry wasn’t specified.
As part of the agreement, Darren Alcus, president of GE Capital Healthcare Financial Services, becomes the president of Capital One’s health care finance business.
Capital One’s announcement comes after months of reports of rumored buyers expressing their interest in acquiring GE Capital Healthcare. One of the country’s largest real estate investment trusts in senior housing, Ventas Inc. (NYSE: VTR) was at one time a rumored bidder.
“This is a strategic investment in a specialty industry segment that we have been building out for the past several years,” said Michael Slocum, president of Capital One’s Commercial Bank, in a press release. “This addition will catapult us to a leading market position in providing financial services to the healthcare sector.”
In a transaction with an unnamed buyer, GE also unloaded $600 million in Healthcare Financial Services-related real estate equity investments on Tuesday, the company announced. Information about the type of health care properties involved was not readily available upon SHN’s request Tuesday afternoon.
Written by Kourtney Liepelt