Medical Properties Trust Announces Acquisition of 10 LifePoint Acute Care Hospitals for $700 Million
Total Assets Grow 47% Year-to-Date
Additional Near-term Investments Anticipated
“This immediately and strongly accretive acquisition of well-run facilities from sophisticated operators and owners demonstrates the expanding market for hospital real estate,” said
The properties will be leased under a master lease agreement with an initial term of 20 years with two five-year extension options. The transaction is expected to achieve highly attractive cash and GAAP lease rates, well within the range that MPT has achieved for recent U.S. acquisitions taking into account annual CPI-based rent escalations subject to a 2% floor. These return yields, when considered with MPT’s blended cost of debt and equity capital, are expected to produce investment spreads of between 3.0% and 4.0%.
The Company expects the transaction to close in the fourth quarter of 2019 or the first quarter of 2020, subject to customary closing conditions. The Company intends to finance the acquisition through a new equity issuance, if market conditions warrant, cash balances, and borrowings under its credit facility. Subsequent to completion of permanent financing, MPT’s net debt to EBITDA ratio on a pro forma basis is expected to range between 5.0 and 5.5 times.
“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,” commented Aldag. “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. Even considering this large acquisition close to year-end, we are continuing to negotiate additional transactions in the U.S. and globally. 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 closing of this transaction, MPT’s portfolio will include pro forma total gross assets of almost
The statements in this press release that are forward looking are based on current expectations and actual results or future events may differ materially. Words such as "expects," "believes," "anticipates," "intends," "will," "should" and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results of the Company or future events to differ materially from those expressed in or underlying such forward-looking statements, including without limitation: the satisfaction of all conditions to, and the timely closing (if at all) of the
Director – Investor Relations
Medical Properties Trust, Inc.