MedicX Fund Limited MXF Acquisition

  MedicX Fund Limited (MXF) - Acquisition

RNS Number : 2126I
The MedicX Fund Limited
23 July 2012








For immediate release 23 July 2012





                                      

                             MedicX Fund Limited

                 ("MedicX Fund", "the Fund" or "the Company")

                                      

                 Acquisition of 31 completed medical centres



MedicX Fund, (LSE: MXF), the  specialist primary care infrastructure  investor 
in modern, purpose-built, primary healthcare properties in the United Kingdom,
is pleased to announce that consistent with its plans to continue to grow  its 
portfolio, it has  completed its  most significant  acquisition to  date of  a 
portfolio of 31  completed and fully  let primary care  medical centres.  The 
purchase  is  by  way  of  a   corporate  acquisition  for  an  initial   cash 
consideration of £16.1  million including transaction  costs of £1.6  million, 
and the assumption of existing debt of £63.8 million.



This portfolio of high quality assets is based throughout England and Scotland
and increases  MedicX Fund's  total property  portfolio to  106 properties  of 
which  95  are   complete  and   operational/fully  let  and   11  are   under 
construction. The  Fund's  total  annualised rent  roll  for  all  properties 
following the acquisition increases to  £24.6 million from £18.7 million  with 
the portfolio as a whole having an average unexpired lease term of 17.4 years.



The portfolio has been  acquired for a  cash yield of 6.04%  based on a  total 
acquisition cost of £91.9  million including the  estimated cost of  resetting 
the debt  to a  current  mark to  market historic  low  rate of  4.13%.  This 
compares to the  Fund's net initial  yield valuation  as at 31  March 2012  of 
5.87%. The Company's  intention is  to reset the  debt as  soon as  practical 
which,  at  current  rates,  would  result   in  the  Fund  locking  into   an 
unprecedented spread of 1.9% between the  acquisition yield and the long  term 
borrowing cost.  This  portfolio  acquisition  meets  the  Fund's  investment 
criteria, and  will  generate  long  term secure  cash  flows  and  value  for 
shareholders,  as  well  as  significantly  increasing  dividend  cover  going 
forward.



The expected initial  impact on adjusted  net asset value  based on the  Jones 
Lang LaSalle (the Fund's valuer) valuation  of £84.9 million is a decrease  of 
£6.8 million  equivalent to  negative 2.7  pence per  share. The  Jones  Lang 
LaSalle valuation assumes  industry standard  purchaser costs  of 5.8%  (being 
£4.9 million or  1.9 pence  per share) which  do not  necessarily reflect  the 
reduced costs  which would  be  payable on  a  corporate acquisition  of  this 
nature. Part of the £6.8 million  also represents a small premium payable  on 
acquiring a quality  portfolio of this  nature. Significant asset  management 
opportunities have been identified by the Investment Adviser that are expected
to result in valuation uplifts over  time. The discounted cashflow net  asset 
value of the acquisition, based  upon the Fund's standard discounted  cashflow 
assumptions of a discount rate of 7%, 2.5% rental growth and 1% capital growth
per annum, represents an uplift of £5.2 million or 2.0 pence per share.



The debt has an average term of 15.3 years, the current debt service cover  is 
estimated at 124.7%, which is expected to improve further following  resetting 
the debt costs, compared to the covenant of just less than 100%. There are no
loan to value covenants associated with the debt.



Following this acquisition and  resetting the debt, the  Fund will have  total 
debt facilities (including undrawn amounts) of £250.9 million with a  weighted 
average estimated fixed cost of 4.37% (incorporating the acquired debt at  the 
current fixable rate of 4.13%) and term of 17.5 years. Post the  acquisition, 
taking into account committed investment not yet funded, the Fund's gearing is
estimated to be 55.0%.



David Staples,  Chairman of  MedicX  Fund, said  "Having already  acquired  13 
properties since  1  October  2011,  we are  delighted  to  have  closed  this 
corporate acquisition of a  further 31 completed and  fully let purpose  built 
primary care medical centres.



Total committed investment  since 1  October 2011  is now  £144 million  which 
takes the  amountof committed  investment  in the  Fund's portfolio  to  £392 
million. These  investments will  enable  the Fund  to  fully draw  down  its 
existing debt facilities and utilise the equity proceeds raised earlier in the
year reducing any cash drag impact on returns.



Following this  acquisition approximately  2%  of the  UK population  will  be 
registered in GP practices within buildings owned by the MedicX Fund.



The portfolio continues to perform well and the Company continues to deliver a
good level of return for its shareholders."



Mike Adams, Chief Executive Officer of MedicX Adviser, the Investment Adviser,
said "This represents the  greatest opportunity to date  for the Fund to  lock 
into an unprecedented  spread between the  cash yield on  acquisition and  the 
long term fixed  cost of debt.  The return on  the acquisition will  increase 
over time as a result of rental growth and asset management."

                                      

                                     End



For further information please contact:



MedicX Group
+44 (0) 1483 869 500

Keith Maddin, Chairman

Mike Adams, Chief Executive Officer

Mark Osmond, Chief Financial Officer



Canaccord Genuity Limited +44 (0)
20 7523 8000

Andrew Zychowski/Helen Goldsmith



Buchanan 
+44 (0) 20 7466 5000

Charles Ryland/Gabriella Clinkard



MedicX Fund Limited +44
(0) 1481 723 450

David Staples, Chairman



Information on MedicX Fund Limited



MedicX Fund Limited ("MXF", the "Fund" or the "Company", or together with  its 
subsidiaries, the  "Group")  is  the specialist  primary  care  infrastructure 
investor in modern, purpose-built primary healthcare properties in the  United 
Kingdom, listed on the London Stock Exchange, with a portfolio comprising  106 
properties.



The Investment  Adviser  to  the  Company is  MedicX  Adviser  Ltd,  which  is 
authorised and  regulated  by  the  Financial  Services  Authority  and  is  a 
subsidiary of the  MedicX Group. The  MedicX Group is  a specialist  investor, 
developer and manager of healthcare properties with 28 people operating across
the UK.

The Company's website  address is www.medicxfund.com.Neither  the contents  of 
the Company's  website  nor  the  contents  of  any  website  accessible  from 
hyperlinks on the  Company's website  (or any other  website) is  incorporated 
into, or forms part of, this announcement.

                     This information is provided by RNS
           The company news service from the London Stock Exchange

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ACQRTMBTMBMTTPT -0- Jul/23/2012 06:00 GMT