Real estate investment trust HCP has signed an agreement to acquire all real estate assets of nursing home operator HCR ManorCare, Inc., for a purchase price of $6.1 billion.
The purchase will consist of $3.528 billion in cash; $1.72 billion reinvested from the payoff of HCP’s existing debt investments in HCR ManorCare (original cash investment of $1.49 billion); and $852 million in HCP common stock issued directly to the shareholders of HCR ManorCare (a fixed 25.7 million shares, or, at HCP’s option, a cash equivalent to the currently agreed value of those shares).
The acquisition includes 338 post-acute, skilled nursing, and assisted living facilities located in 30 states, with the highest concentrations in Ohio, Pennsylvania, Florida, Illinois, and Michigan.
“Going forward, our company leadership remains the same, we will continue our high level of investment in training and facilities, and our employees will continue to provide the same high-quality care that our patients and residents expect,” said Paul Ormond, president and CEO of HCR ManorCare, in a release.
HCR ManorCare and its affiliates will continue to operate the assets pursuant to a long-term triple-net master lease supported by a guaranty from HCR ManorCare. In addition, HCR ManorCare will grant HCP an option to acquire a 9.9% interest in HCR ManorCare for an additional purchase price of $95 million.
“Pro forma for this transaction, HCP will have $19 billion in assets comprised of a well-balanced portfolio of 1,000 properties,” said Jay Flaherty, HCP’s chairman and CEO, in a release.