Omega Healthcare Investors Agrees To Acquire MedEquities Realty Trust For $600M

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Real estate investment trust Omega Healthcare Advisors (NYSE: OHI) has agreed to acquire MedEquities Realty Trust  (NYSE: MRT) in a cash and stock transaction valued at $600 million.

As part of the transaction, Omega will acquire the fee simple interest in 34 facilities operated by 11 operators in seven states. Omega will also acquire approximately $34 million in mortgage loans.

Under the terms of the transaction, MRT shareholders will receive $2 in cash and 0.235 OHI shares for each MRT share owned, which represents $10.26 per share based on Monday’s closing price for OHI.The boards of directors for both companies have unanimously approved the transaction.

“This acquisition reinforces our commitment to the skilled nursing and senior housing industry, while adding new asset types to our portfolio furthering our strategic objectives,” says Taylor Pickett, CEO of Hunt Valley-based Omega. “MedEquities has built a high-quality diversified portfolio, which should provide Omega with meaningful future growth opportunities.”

Omega is a real estate investment trust that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. As of Sept. 30, 2018, Omega’s total portfolio consisted of 917 facilities spread across 41 states and the United Kingdom.

Headquartered in Nashville, MedEquities, is a self-managed real estate investment trust that invests in a mix of healthcare properties and healthcare-related real estate debt investments within the acute, post-acute and behavioral sectors of healthcare services.

Completion of the transaction is subject to satisfaction of customary closing conditions, including the approval by the stockholders of MedEquities. The transaction is expected to close in the first half of this year.

“This is a very compelling transaction for MedEquities’ stockholders,” says John McRoberts, CEO of MedEquities. “We believe going forward that our stockholders will be in an excellent position from having an investment in Omega’s diversified portfolio. Additionally, our operators will benefit from Omega’s depth of knowledge of the healthcare industry, its strong capital position and its commitment to support and grow with its tenants.”

 

Source: REBusiness Online

10 Biggest Private Equity Healthcare Deals Of 2018

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In 2018, there were 715 private equity deals in the healthcare industry as of mid-December for a combined value of $103.72 billion, up from 709 deals worth $88.87 billion, according to Forbes.

Here are the year’s 10 biggest private equity investments in healthcare:

1. Envision Healthcare; $9.9 billion; Kohlberg Kravis Roberts

2. Athenahealth; $5.7 billion; Veritas Capital, Evergreen Coast Capital

3. Brentwood, Tenn.-based LifePoint Health; $5.6 billion; Apollo Global Management, ATP Private Equity Partners, RCCH HealthCare Partners

4. Kindred Healthcare; $4.1 billion; Welsh, Carson, Anderson & Stowe, TPG Capital, Humana

5. American Medical Response; $2.4 billion; Air Medical Group Holdings, Kohlberg Kravis Roberts, Ardian, Koch Equity Development

6. Sound Physicians; $2.15 billion; Revelstoke Capital Partners, Athyrium Capital Management, Summit Partners, Silversmith Capital Partners

7. Lifescan; $2.1 billion; Platinum Equity

8. Curo Health Services; $1.4 billion; TPG Capital, Welsh, Carson, Anderson & Stowe, Humana

9. Juice Plus; $1.235 billion; Altamont Capital Partners

10. Analogic; $1.1 billion; Altaris Capital Partners

 

Source: Becker’s Hospital Review

Consolidation In Healthcare Spurs Medical Investor To Adopt Large Tenant Strategy

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Consolidation in the healthcare industry is spurring a need for large blocks of medical office space.

Medical office building at 3531 Fashion Way in Torrance (PHOTO CREDIT: Meridian)

Medical real estate investor and developer Meridian has adopted a large tenant strategy for its latest acquisition. The property, a 26,000-square-foot medical office building in Torrance, was 100% vacant at the time of the sale and was marketed as a redevelopment opportunity. Instead of redeveloping the property into another use, Meridian saw that this would fulfill a need for large medical office tenants, and it was able to secure a tenant for half of the property during escrow.

“As the healthcare industry continues to consolidate, we’re seeing much more demand for larger blocks of contiguous space,” R.J. Sommerdyke, director of acquisitions at Meridian, tells GlobeSt.com. “We felt particularly good about this acquisition because it represented a unique opportunity to provide tenants with one of the only options in the market for large blocks of ground-floor space, which is very desirable from a medical perspective. We’re already seeing our thesis being proven by securing a large tenant so early-on in the process.”

The renovation will be complete late next year, but the early leasing activity bodes well for early lease-up.

“The property was previously operated as an imaging and radiation oncology center,” adds Sommerdyke. “As such, the building housed two linear accelerator vaults, which are used for radiation therapy in cancer patients. These vaults are extremely expensive to construct at $1.5 million to $2 million each, and by having those improvements in place, we can offer a very compelling rental rate to a future tenant who can utilize those improvements versus having to construct them on their own.”

The location will also help to promote leasing activity, and was a major reason why Meridian saw potential in the property.

“Meridian pursued and ultimately purchased the property due to the unique location between two major hospitals and the inherent value in the existing building improvements,” explains Sommerdyke.

While the micro-market is ideal for the medical office project, Torrance in general has improving fundamentals that helped to drive Meridian’s interest in the property.

“In addition to great demographics, the medical office fundamentals for Torrance are strong and continue to improve,” John Pollock, CEO of Meridian, tells GlobeSt.com. “The submarket has consistently experienced positive net absorption since 2010 and market vacancy for medical has dropped to single digits.”

 

Source: GlobeSt.