{"id":1004117012,"date":"2015-04-07T05:42:34","date_gmt":"2015-04-07T13:42:34","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004117012"},"modified":"2022-12-05T09:38:58","modified_gmt":"2022-12-05T17:38:58","slug":"ventas-bulks-up-slims-down-in-two-mega-deals","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/ventas-bulks-up-slims-down-in-two-mega-deals\/","title":{"rendered":"Ventas Bulks Up, Slims Down in Two Mega Deals"},"content":{"rendered":"
\"D_Cafaro\"<\/a>

Debra Cafaro, Ventas<\/p><\/div>\n

By Scott Baltic, Contributing Editor<\/i><\/p>\n

In a pair of moves that are entirely in line with its substantial history of bold mergers, Ventas will buy Ardent Health Services for $1.75 billion and spin off most of its post-acute\/skilled nursing facility portfolio into an independent publicly traded REIT, Ventas announced Monday.<\/p>\n

The spinoff, called SpinCo, will own 355 triple-net-leased SNFs and other healthcare assets operated by 44 private regional and local care providers.<\/p>\n

Ardent is one of the 10 largest for-profit hospital companies in the United States and is owned by private equity funds managed by Welsh, Carson, Anderson & Stowe, of Nashville. It reportedly generates about $2 billion in annual revenues with more than 50 percent of its revenue derived from commercial (private) payers. After the closing, it will remain headquartered in Nashville.<\/p>\n

\u201cWe are excited to add Ardent Health Services to the Ventas portfolio, giving us a strong foothold in the large U.S. hospital market, aided by the presence of a highly regarded hospital management team,\u201d Ventas chairman & CEO Debra Cafaro told Commercial Property Executive<\/i>. \u201cAt the closing, we intend to separate the hospital operations from the real estate ownership because healthcare REITs are not permitted under the REIT rules to operate their properties. There will be long-term triple-net leases between the landlord, Ventas and the operator, Ardent. The hospital operations (Ardent) will be owned after closing by a newly formed entity comprised of current management of Ardent, other equity sources and up to 9.9 percent owned by Ventas.\u201d<\/p>\n

Ventas will own 10 hospitals (and related real estate) operated by Ardent under the names BSA Health System in Amarillo, Texas; Hillcrest HealthCare System in Tulsa, Okla.; and Lovelace Health System in Albuquerque, N.M. These assets include acute care, heart, rehab and women\u2019s hospitals totaling about 3.2 million square feet and 2,045 beds.<\/p>\n

\u201cThe addition of Ardent\u2019s platform, which includes high-quality assets with significant market share in three key markets, and a highly regarded hospital management team, creates a strong avenue for growth in the attractive hospital real estate market,\u201d Cafaro said in a release. \u201cThe transaction also increases our diversification by property type and operator.\u201d<\/p>\n

\u201c[W]e look forward to expanding Ardent and capitalizing on the significant growth opportunities we see in the immense, highly fragmented U.S. hospital market,\u201d said Ardent president & CEO David Vandewater.<\/p>\n

Ventas expects to fund the transaction (which is expected to close mid-year) on a leverage-neutral basis with proceeds from previously announced dispositions and loan repayments, bank debt and long-term debt and equity capital sources.<\/p>\n

The spinoff is expected to be completed in the second half of this year and is intended to qualify as a tax-free distribution to Ventas shareholders.<\/p>\n

The SpinCo portfolio will span 37 states and be diversified by operator, with only one tenant, Senior Care Centers, expected to constitute more than 10 percent of the REIT\u2019s NOI. In its first full year of operation, SpinCo is expected to generate estimated NOI of $315 million to $320 million. Current Ventas president Raymond Lewis will serve as CEO and a director of SpinCo, and Ventas presiding director Douglas Crocker II will serve as SpinCo\u2019s independent non-executive chairman of the board.<\/p>\n

\u201cThis transaction demonstrates our continued commitment to enhancing shareholder value by creating two focused companies with distinct strategies,\u201d Cafaro said in a release. \u201cSpinCo will thrive as an independent, pure-play SNF REIT with a seasoned management team … For Ventas, the spin-off enhances our growth profile, increases our NOI contribution from top-tier operators, and improves our industry-leading private pay NOI composition.\u201d<\/p>\n

\u201cWith a focus on the highly fragmented post-acute\/SNF market, SpinCo will have the necessary size, balance sheet strength and access to capital to pursue significant consolidation opportunities,\u201d added Lewis.<\/p>\n

Ultimately, SpinCo plans to apply to have its common stock authorized for listing on the New York Stock Exchange.<\/p>\n","protected":false},"excerpt":{"rendered":"

In a pair of moves that are entirely in line with its substantial history of bold mergers, Ventas will be buying big and spinning off.<\/p>\n","protected":false},"author":952,"featured_media":1004117014,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21783,21754,21742],"tags":[],"class_list":["post-1004117012","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment","category-medical-office","category-latest"],"acf":[],"yoast_head":"\nVentas Bulks Up, Slims Down in Two Mega Deals - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/ventas-bulks-up-slims-down-in-two-mega-deals\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ventas Bulks Up, Slims Down in Two Mega Deals\" \/>\n<meta property=\"og:description\" content=\"In a pair of moves that are entirely in line with its substantial history of bold mergers, Ventas will be buying big and spinning off.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/ventas-bulks-up-slims-down-in-two-mega-deals\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-04-07T13:42:34+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-05T17:38:58+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2015\/04\/D_Cafaro.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"309\" \/>\n\t<meta property=\"og:image:height\" content=\"273\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Anna Spiewak\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/ventas-bulks-up-slims-down-in-two-mega-deals\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/ventas-bulks-up-slims-down-in-two-mega-deals\/\",\"name\":\"Ventas Bulks Up, Slims Down in Two Mega Deals - 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