Omega Healthcare to Buy Aviv REIT in $1.65 Billion Deal

Omega Healthcare Investors Inc. agreed to buy Aviv REIT Inc. for about $1.65 billion in stock to create a real estate investment trust with skilled nursing facilities in 41 U.S. states.

Omega offered 0.90 of a share for each Aviv share, equivalent to $34.97 per share, Hunt Valley, Maryland-based Omega said in a statement today. That’s about 16 percent more than Aviv’s closing stock price yesterday.

Real estate companies are taking advantage of the growing demand for medical services and nursing homes as the U.S. population ages. In August, NorthStar Realty Finance Corp. agreed to buy Griffin-American Healthcare REIT II for about $3.4 billion. Ventas Inc. in June said it would purchase American Realty Capital Healthcare Trust Inc. for $2.6 billion.

Omega Chief Executive Officer Taylor Pickett will lead the new company, which will have 874 properties. Aviv Chairman and CEO Craig Bernfield will join the board.

“The combined company will have unrivaled resources to pursue attractive acquisition and development opportunities,” Pickett said in the statement. It “will also have the human and capital resources to pursue new operator relationships for continued external growth.”

Aviv REIT went public in March 2013, raising $264 million in its initial stock offering. Shares of the Chicago-based company climbed 12 percent today to $33.73 and have gained 42 percent this year. Omega fell 1.8 percent today to $38.16.

The companies expect to complete the deal by the end of March. Omega shareholders will hold about 70 percent of the enlarged company. Partners at Aviv Healthcare Properties LP will own the rest.

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