Chicago-based Ventas Inc. (NYSE: VTR) is providing secured debt financing of $700 million to a subsidiary of Ardent Health Services in connection with its acquisition of LHP Hospital Group, Inc.
Ardent is the hospital tenant of real estate investment trust (REIT) Ventas. The deal underscores Ventas’ portfolio repositioning in the last few years and the vision of consolidation in the space by CEO and Chairman Debra Cafaro. Ventas owns nearly all of Ardent’s current real estate, including 10 of its 14 hospitals and related medical facilities.
The transaction is expected to close in the first quarter of 2017, pending customary regulatory reviews and approvals. Terms of the purchase were not disclosed.
“This commitment is aligned with our position as the premier capital partner to leading senior living and health care providers and our strategy of building a formidable, high quality hospital business,” Cafaro said in a statement. “The LHP acquisition validates our investment last year in Ardent’s experienced management team and scalable infrastructure, and its ability to consolidate the large, fragmented hospital sector.”
Ardent was acquired for $1.75 billion in 2015 by an affiliate of Equity Group Investments and Ventas. Ventas owns a 9.9% equity stake in addition to its real estate assets.
Ventas is providing a five-year LIBOR-based loan guaranteed by Ardent’s parent company with an interest rate of approximately 8%.
Ardent’s acquisition of LHP Hospital Group will create the second largest private, for-profit hospital operator in the United States with 19 hospitals across six states and $3 billion in revenues. Upon completion of the transaction, Ardent will operate 3,200 patient beds with approximately 18,000 employees, including more than 475 employed physicians.
Written by Amy Baxter