Medical Properties Trust acquires 10 hospitals for $700M
Medical Properties Trust Inc. has entered into a definitive agreement with the Brentwood, Tennessee-based LifePoint Health Inc. to acquire the real estate assets for 10 acute care hospitals in six states.
The aggregate purchase price is $700 million and the facilities will be leased back to LifePoint, which is a portfolio company with certain funds managed by the New York City-based Apollo Global Management Inc.
The deal is the latest in a series of notable acquisitions by Medical Properties Trust, which is one of Birmingham's most successful publicly traded companies.
“This immediately and strongly accretive acquisition of well-run facilities from sophisticated operators and owners demonstrates the expanding market for hospital real estate,” said Edward Aldag chairman, president and CEO of MPT. “Importantly, the transaction further solidifies our relationship with LifePoint and Apollo, and is a strong indicator that interest in MPT’s sale and leaseback structure continues to grow not only in the U.S. but globally.”
The properties will be leased under a master lease agreement with an initial term of 20 years with two, five-year extension options. MPT intends to finance the acquisition through a new equity issuance, cash balances, and borrowings under its credit facility.
“LifePoint is a proven operator, which we are very well acquainted with and respect for their expertise in operating hospitals in mid-sized markets. The 10 acute care hospitals that MPT is acquiring are critical to the populations they serve and have dominant market leadership positions,” Aldag said. “This investment improves our overall diversification by reducing the concentration of our largest operator relationship to 28% and our largest single facility to 2.7%, while increasing the number of U.S. states in our portfolio to 34.Our pipeline remains robust and while there is no certainty that we will announce additional agreements during 2019, we remain confident that our near term growth will continue.”
Upon the closure of the transaction, MPT’s portfolio will include gross assets of almost $14 billion, representing approximately 40,000 beds, in 34 U.S. states and in Germany, the United Kingdom, Switzerland, Italy, Spain and Australia.
The company has also commenced an underwritten public offering to sell 50,000,000 shares of its common stock. The company intends to grant the underwriters in the offering a 30-day option to purchase up to an additional 7,500,000 shares of its common stock.
J.P. Morgan, Bank of America Securities and Goldman Sachs & Co. LLC will act as joint book running managers for the offering.
The deal is the latest in a series of notable acquisitions by Medical Properties Trust, which is one of Birmingham's most successful publicly traded companies.
“This immediately and strongly accretive acquisition of well-run facilities from sophisticated operators and owners demonstrates the expanding market for hospital real estate,” said Edward Aldag chairman, president and CEO of MPT. “Importantly, the transaction further solidifies our relationship with LifePoint and Apollo, and is a strong indicator that interest in MPT’s sale and leaseback structure continues to grow not only in the U.S. but globally.”
The properties will be leased under a master lease agreement with an initial term of 20 years with two, five-year extension options. MPT intends to finance the acquisition through a new equity issuance, cash balances, and borrowings under its credit facility.
“LifePoint is a proven operator, which we are very well acquainted with and respect for their expertise in operating hospitals in mid-sized markets. The 10 acute care hospitals that MPT is acquiring are critical to the populations they serve and have dominant market leadership positions,” Aldag said. “This investment improves our overall diversification by reducing the concentration of our largest operator relationship to 28% and our largest single facility to 2.7%, while increasing the number of U.S. states in our portfolio to 34.Our pipeline remains robust and while there is no certainty that we will announce additional agreements during 2019, we remain confident that our near term growth will continue.”
Upon the closure of the transaction, MPT’s portfolio will include gross assets of almost $14 billion, representing approximately 40,000 beds, in 34 U.S. states and in Germany, the United Kingdom, Switzerland, Italy, Spain and Australia.
The company has also commenced an underwritten public offering to sell 50,000,000 shares of its common stock. The company intends to grant the underwriters in the offering a 30-day option to purchase up to an additional 7,500,000 shares of its common stock.
J.P. Morgan, Bank of America Securities and Goldman Sachs & Co. LLC will act as joint book running managers for the offering.