- Anticipated annual FFO, AFFO and FAD
accretion of approximately $0.05 per Omega share.
- Operator diversification will increase
with 9 new operators.
- Property type diversification will
increase non-skilled nursing assets modestly by $296 million,
including $75 million invested in a hospital facility leased to a
subsidiary of Baylor, Scott & White Health.
- Significant synergies expected.
- Omega will acquire the fee simple
interest in 34 facilities operated by 11 operators in 7
states.
- Omega will acquire approximately $34
million in mortgage loans.
Omega Healthcare Investors, Inc. (NYSE: OHI) (“Omega”) and
MedEquities Realty Trust, Inc. (NYSE: MRT) (“MedEquities”) today
announced the execution of a definitive merger agreement under
which Omega will acquire all of the outstanding shares of
MedEquities. The transaction represents an enterprise value of
approximately $600 million for MedEquities and further diversifies
Omega’s assets and operators. The boards of directors of both
companies have unanimously approved the transaction.
Under the terms of the agreement, MedEquities stockholders will
receive a fixed exchange ratio of 0.235 Omega common shares plus
$2.00 in cash for each share of MedEquities common stock held by
them, which represents a value of $10.26 per MedEquities share
based on the $35.15 closing price for Omega common stock on
December 31, 2018. Separately, MedEquities will declare a special
cash dividend of $0.21 per share payable to the holders of record
of MedEquities common stock as of the end of trading on the New
York Stock Exchange on the trading day immediately prior to the
closing date of the transaction. There are no changes planned to
Omega’s board of directors or executive officers related to the
merger transaction.
Taylor Pickett, Omega’s Chief Executive Officer stated, “John
and his team have built a high quality diversified portfolio, which
should provide Omega with meaningful future growth opportunities.”
Mr. Pickett continued, “This acquisition reinforces our commitment
to the skilled nursing and senior housing industry, while adding
new asset types to our portfolio furthering our strategic
objectives.”
John McRoberts, Chairman and Chief Executive Officer of
MedEquities added, “This is a very compelling transaction for
MedEquities’ stockholders. We believe going forward that our
stockholders will be in an excellent position from having an
investment in Omega’s diversified portfolio. Taylor and his team
have a long and successful history of asset growth and
diversification as well as solid asset management. Additionally,
our operators will benefit from Omega’s depth of knowledge of the
healthcare industry, their strong capital position and their
commitment to support and grow with their tenants.”
Approvals and Timing
Completion of the transaction is subject to satisfaction of
customary closing conditions, including the approval by the
stockholders of MedEquities. The transaction is expected to close
in the first half of 2019. Completion of the transaction is not
subject to approval by Omega’s stockholders and is not subject to
any financing contingency.
Bryan Cave Leighton Paisner LLP is serving as legal advisor to
Omega. Morrison & Foerster LLP is serving as legal advisor and
Citigroup Global Markets Inc. is serving as exclusive financial
advisor to MedEquities.
About Omega
Omega is a real estate investment trust that invests in the
long-term healthcare industry, primarily in skilled nursing and
assisted living facilities. Its portfolio of assets is operated by
a diverse group of healthcare companies, predominantly in a
triple-net lease structure. The assets span all regions within the
US, as well as in the UK.
About MedEquities
MedEquities Realty Trust is a self-managed and self-administered
real estate investment trust that invests in a mix of healthcare
properties and healthcare-related real estate debt investments
within the acute, post-acute and behavioral sectors of healthcare
services. MedEquities’ strategy has been to become an integral
capital partner with high-quality and growth-oriented
facility-based providers of healthcare services on a nationwide
basis, primarily through net-leased real estate investments.
Additional Information and Where to Find It
In connection with the proposed transaction, Omega will file a
registration statement on Form S-4 with the Securities and Exchange
Commission (“SEC”) that includes the preliminary proxy statement of
MedEquities and that also constitutes a preliminary prospectus of
Omega. After the registration statement is declared effective,
MedEquities plans to mail to its stockholders the definitive proxy
statement/prospectus. MedEquities and Omega may also file other
documents with the SEC regarding the proposed transaction. This
document is not a substitute for the proxy statement/prospectus or
registration statement or any other document which MedEquities or
Omega may file with the SEC. Investors are urged to read the
registration statement, the proxy statement/prospectus and any
other relevant documents when they are available, as well as any
amendments or supplements to these documents, carefully and in
their entirety because they contain important information.
Investors may obtain free copies of the registration statement,
including the preliminary proxy statement/prospectus, and other
relevant documents filed by Omega and MedEquities with the SEC
through the website maintained by the SEC at www.sec.gov, or by
contacting MedEquities at 3100 West End Avenue, Suite 1000,
Nashville, Tennessee 37203 Attn: Tripp Sullivan, (615) 760-1104, or
Omega at Omega Healthcare Investors, Inc. 303 International Circle,
Suite 200 Hunt Valley, Maryland 21030, Attn: Matthew Gourmand,
Senior VP of Investor Relations, (410) 427-1714.
Participants in the Solicitation
Omega, MedEquities and their respective directors and executive
officers may be deemed to be participants in the solicitation of
proxies from MedEquities’ stockholders in respect of the proposed
transaction. Information regarding Omega’s directors and executive
officers can be found in Omega’s definitive proxy statement filed
with the SEC on April 30, 2018, its Form 10-K filed with the SEC on
February 23, 2018, and its Form 8-K reports filed with the SEC on
October 25, 2018 and November 2, 2018, as well as its other filings
with the SEC. Information regarding the directors and executive
officers of MedEquities can be found in its definitive proxy
statement filed with the SEC on April 16, 2018, as well as its
other filings with the SEC. Additional information regarding the
interests of such potential participants will be included in the
registration statement, proxy statement/prospectus and other
relevant documents to be filed with the SEC in connection with the
proposed transaction. These documents will be available free of
charge on the SEC’s website and from Omega and MedEquities, as
applicable, using the sources indicated above.
No Offer or Solicitation
This communication is not intended to and does not constitute an
offer to sell or the solicitation of an offer to buy, sell or
solicit any securities or any proxy, vote or approval, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be deemed to be made
except by means of a prospectus meeting the requirements of Section
10 of the Securities Act of 1933, as amended.
Forward-Looking Statements
Certain statements in this document constitute “forward-looking
statements” within the meaning of the federal securities laws,
including all statements regarding the proposed transaction, future
financial position and financial metrics, expected synergies and
benefits, dividends and dividend plans, financing plans, and other
expectations and beliefs regarding future events. In some cases,
you can identify forward-looking statements by the use of
forward-looking terminology including “anticipate,” “if,”
“believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,”
“should,” “would,” “will,” “seeks,” “approximately,” “outlook,”
“looking forward” and other similar expressions or the negative
forms of the same. Omega and MedEquities caution readers that these
and other forward-looking statements are not guarantees of future
results and are subject to risks, uncertainties and assumptions
that could cause actual results to differ materially from those
expressed in any forward-looking statements. Important risk factors
that may cause such a difference include, but are not limited to
risks and uncertainties related to i) the risk that the conditions
to closing of the merger may not be satisfied; ii) the ability of
Omega to integrate the acquired business successfully and to
achieve anticipated cost savings and other synergies; iii) the
possibility that other anticipated benefits of the proposed
transaction will not be realized, including without limitation,
anticipated revenues, expenses, earnings and other financial
results; iv) potential litigation relating to the proposed
transaction that could be instituted; v) the ability to meet
expectations regarding the timing and closing of the transaction;
vi) possible disruptions from the proposed transaction that could
harm the business of the companies; vii) the ability of each
company’s operators and borrowers to maintain the financial
strength and liquidity necessary to satisfy their respective rent
and debt obligations; viii) the impact of healthcare reform and
regulation, including cost containment measures and changes in
reimbursement policies, procedures and rates; and ix) the risk
factors described in the most recent Annual Reports on Form 10-K
and other filings of Omega and MedEquities with the SEC. Many of
these factors are beyond the control of the companies and their
management. The list of factors presented here should not be
considered to be a complete statement of all potential risks and
uncertainties. Unlisted factors may present significant additional
obstacles or impediments to the realization of forward looking
statements. Neither Omega nor MedEquities assumes any obligation to
provide revisions or updates to any forward looking statements,
whether as a result of new information, future developments or
otherwise, should circumstances change, except as otherwise
required by securities and other applicable laws.
Non-GAAP Measures
Funds From Operations (“FFO”), Adjusted FFO and Funds Available
for Distribution (“FAD”) are non-GAAP financial measures. Omega
calculates and reports FFO in accordance with the definition and
interpretive guidelines issued by the National Association of Real
Estate Investment Trusts (“NAREIT”), and consequently, FFO is
defined as net income (computed in accordance with GAAP), adjusted
for the effects of asset dispositions and certain non-cash items,
primarily depreciation and amortization and impairments on real
estate assets, and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated
partnerships and joint ventures will be calculated to reflect funds
from operations on the same basis. FFO described herein is not
necessarily comparable to FFO of other real estate investment
trusts that do not use the same definition or implementation
guidelines or interpret the standards differently from Omega or
MedEquities.
Adjusted FFO is calculated as FFO excluding the impact of
non-cash stock-based compensation and certain revenue and expense
items identified above. FAD is calculated as Adjusted FFO less
non-cash interest expense and non-cash revenue, such as
straight-line rent. Omega’s computation of Adjusted FFO and FAD are
not comparable to the NAREIT definition of FFO or to similar
measures reported by other real-estate investment trusts.
These non-GAAP measures are not measures of financial
performance under GAAP and should not be considered as measures of
liquidity, alternatives to net income or indicators of any other
performance measure determined in accordance with GAAP. Investors
and potential investors should not rely on these non-GAAP measures
as substitutes for any GAAP measure, including net income.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190102005141/en/
Matthew Gourmand, Senior VP of Investor Relations, (410)
427-1714, orBob Stephenson, CFO, (410) 427-1722
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