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Health Care REIT to Buy Genesis Real Estate Assets in $2.4 Billion Deal
Health Care REIT Inc., the third- largest U.S. health-care real estate investment trust, agreed to buy substantially all the property assets of closely held Genesis HealthCare for $2.4 billion.
Health Care REIT will buy 147 post-acute, skilled nursing and assisted living properties in 11 states, the Toledo, Ohio- based company said in a statement. Genesis, of Kennett Square, Pennsylvania, will rent the properties from Health Care REIT and operate them, according to the statement.
The deal is the second announced in the industry today as demand for real estate climbs. Ventas Inc. agreed to buy Nationwide Health Properties Inc. for about $5.7 billion in the biggest transaction ever among health-care REITs.
“We expect Health Care REIT’s acquisition and leaseback of Genesis HealthCare’s assets will be highly accretive to HCN’s earnings,” George Chapman, Health Care REIT’s chairman and chief executive officer, said in the statement. “Genesis has built a robust pipeline of potential acquisition and development opportunities as it expands its footprint along the Eastern Seaboard.”
JER Partners
Genesis is owned by private-equity firms JER Partners and and Formation Capital LLC, which bought the company in 2007. The property owner has had 9 percent annual average revenue growth since the acquisition, McLean, Virginia-based JER said in a separate statement today.
The purchase will add 39 cents a share to Health Care REIT’s annual funds from operations, the company said. FFO is a measure of cash flow used by REITs.
Health Care REIT plans to offer 25 million common shares and about 12.5 million shares of convertible preferred stock to help finance the deal. It expects the transaction to be completed in the second quarter.
The deal was announced after the close of U.S. exchanges. Health Care REIT rose $1.36, or 2.7 percent, to $52.22 at 4:15 p.m. in New York Stock Exchange composite trading.
To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net
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