Transaction Makes Ardent the Second Largest
Private, For-Profit Hospital Operator in the U.S. Generating $3
Billion in Revenues in Six States with Significant Market Share
Adds Key Not-For-Profit and Academic Medical
Center Relationships to Ventas’s Hospital Platform, Further
Expanding the Company’s Partnerships with Institutional-Quality
Health Systems
Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) announced
today that it has completed its previously announced secured debt
financing in the amount of $700 million to a subsidiary of Ardent
Health Services (“Ardent”) in connection with Ardent’s acquisition
of LHP Hospital Group, Inc. (“LHP”), which was completed today.
To complete Ardent’s purchase of LHP, Ventas provided a
five-year LIBOR-based loan (“the Loan”), guaranteed by Ardent’s
parent company, which bears an initial cash interest rate of
approximately 8%. As part of the transaction, Ardent also received
a significant equity contribution from its majority owner, an
affiliate of Equity Group Investments (“EGI”). Ventas also made an
equity contribution to maintain its 9.9% equity stake in Ardent.
The transaction is structured to enable Ardent to maintain a strong
financial profile.
“We are proud to be part of a powerful partnership with Ardent
and EGI as Ardent grows its leading high-quality hospital company
and continues to serve patients, physicians and communities,” said
Chairman and Chief Executive Officer Debra A. Cafaro. “The
acquisition of LHP enhances Ardent’s scale and diversification by
adding LHP’s high-quality portfolio, valuable partnerships with
not-for-profit and academic medical centers and significant market
share in attractive markets.”
Ventas expects the Loan to be accretive to 2017 normalized funds
from operations (“FFO”) per share. The impact of the transaction is
already reflected in the Company’s 2017 normalized FFO per share
guidance range issued in its February 10, 2017 press release.
Ventas funded the transaction using cash on hand and other capital
sources.
Upon completion of the transaction today, Ardent became the
second largest private, for-profit hospital operator in the United
States, with 19 hospitals and related sites of care in six states
and $3 billion in annual revenues. Through its shared focus on
local partnerships and collaboration, Ardent will continue LHP’s
emphasis on joint venture partnerships with top tier not-for-profit
and academic health systems.
David T. Vandewater will continue to serve as CEO of Ardent.
Ardent has also appointed Paul Kappelman, interim CEO of LHP, as
the executive vice president and COO for Ardent. Kappelman will
oversee day-to-day operations of Ardent in all of its markets. Over
the coming year, Ardent expects to realize meaningful synergies in
the transaction.
Ventas, Inc., an S&P 500 company, is a leading real estate
investment trust. Its diverse portfolio of approximately 1,300
assets in the United States, Canada and the United Kingdom consists
of seniors housing communities, medical office buildings, life
science and innovation centers, skilled nursing facilities,
specialty hospitals and general acute care hospitals. Through its
Lillibridge subsidiary, Ventas provides management, leasing,
marketing, facility development and advisory services to highly
rated hospitals and health systems throughout the United
States.
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements regarding the Company’s or its
tenants’, operators’, borrowers’ or managers’ expected future
financial condition, results of operations, cash flows, funds from
operations, dividends and dividend plans, financing opportunities
and plans, capital markets transactions, business strategy,
budgets, projected costs, operating metrics, capital expenditures,
competitive positions, acquisitions, investment opportunities,
dispositions, merger or acquisition integration, growth
opportunities, expected lease income, continued qualification as a
real estate investment trust (“REIT”), plans and objectives of
management for future operations and statements that include words
such as “anticipate,” “if,” “believe,” “plan,” “estimate,”
“expect,” “intend,” “may,” “could,” “should,” “will” and other
similar expressions are forward-looking statements. These
forward-looking statements are inherently uncertain, and actual
results may differ from the Company’s expectations. The Company
does not undertake a duty to update these forward-looking
statements, which speak only as of the date on which they are
made.
The Company’s actual future results and trends may differ
materially from expectations depending on a variety of factors
discussed in the Company’s filings with the Securities and
Exchange Commission. These factors include without limitation:
(a) the ability and willingness of the Company’s tenants,
operators, borrowers, managers and other third parties to satisfy
their obligations under their respective contractual arrangements
with the Company, including, in some cases, their obligations to
indemnify, defend and hold harmless the Company from and against
various claims, litigation and liabilities; (b) the ability of the
Company’s tenants, operators, borrowers and managers to maintain
the financial strength and liquidity necessary to satisfy their
respective obligations and liabilities to third parties, including
without limitation obligations under their existing credit
facilities and other indebtedness; (c) the Company’s success in
implementing its business strategy and the Company’s ability to
identify, underwrite, finance, consummate and integrate
diversifying acquisitions and investments; (d) macroeconomic
conditions such as a disruption of or lack of access to the capital
markets, changes in the debt rating on U.S. government securities,
default or delay in payment by the United States of its
obligations, and changes in the federal or state budgets resulting
in the reduction or nonpayment
of Medicare or Medicaid reimbursement rates;
(e) the nature and extent of future competition, including new
construction in the markets in which the Company’s seniors housing
communities and medical office buildings (“MOBs”) are located;
(f) the extent and effect of future or pending healthcare reform
and regulation, including cost containment measures and changes in
reimbursement policies, procedures and rates; (g) increases in the
Company’s borrowing costs as a result of changes in interest rates
and other factors; (h) the ability of the Company’s tenants,
operators and managers, as applicable, to comply with laws, rules
and regulations in the operation of the Company’s properties, to
deliver high-quality services, to attract and retain qualified
personnel and to attract residents and patients; (i) changes in
general economic conditions or economic conditions in the markets
in which the Company may, from time to time, compete, and the
effect of those changes on the Company’s revenues, earnings and
funding sources; (j) the Company’s ability to pay down, refinance,
restructure or extend its indebtedness as it becomes due; (k) the
Company’s ability and willingness to maintain its qualification as
a REIT in light of economic, market, legal, tax and other
considerations; (l) final determination of the Company’s taxable
net income for the year ended December 31, 2016 and for
the year ending December 31, 2017; (m) the ability and
willingness of the Company’s tenants to renew their leases with the
Company upon expiration of the leases, the Company’s ability to
reposition its properties on the same or better terms in the event
of nonrenewal or in the event the Company exercises its right to
replace an existing tenant, and obligations, including
indemnification obligations, the Company may incur in connection
with the replacement of an existing tenant; (n) risks associated
with the Company’s senior living operating portfolio, such as
factors that can cause volatility in the Company’s operating income
and earnings generated by those properties, including without
limitation national and regional economic conditions, costs of
food, materials, energy, labor and services, employee benefit
costs, insurance costs and professional and general liability
claims, and the timely delivery of accurate property-level
financial results for those properties; (o) changes in exchange
rates for any foreign currency in which the Company may, from time
to time, conduct business; (p) year-over-year changes in the
Consumer Price Index or the UK Retail Price Index and the effect of
those changes on the rent escalators contained in the Company’s
leases and the Company’s earnings; (q) the Company’s ability and
the ability of its tenants, operators, borrowers and managers to
obtain and maintain adequate property, liability and other
insurance from reputable, financially stable providers; (r) the
impact of increased operating costs and uninsured professional
liability claims on the Company’s liquidity, financial condition
and results of operations or that of the Company’s tenants,
operators, borrowers and managers, and the ability of the Company
and the Company’s tenants, operators, borrowers and managers to
accurately estimate the magnitude of those claims; (s) risks
associated with the Company’s MOB portfolio and operations,
including the Company’s ability to successfully design, develop and
manage MOBs and to retain key personnel; (t) the ability of the
hospitals on or near whose campuses the Company’s MOBs are located
and their affiliated health systems to remain competitive and
financially viable and to attract physicians and physician groups;
(u) risks associated with the Company’s investments in joint
ventures and unconsolidated entities, including its lack of sole
decision-making authority and its reliance on its joint venture
partners’ financial condition; (v) the Company’s ability to obtain
the financial results expected from its development and
redevelopment projects; (w) the impact of market or issuer events
on the liquidity or value of the Company’s investments in
marketable securities; (x) consolidation activity in the seniors
housing and healthcare industries resulting in a change of control
of, or a competitor’s investment in, one or more of the Company’s
tenants, operators, borrowers or managers or significant changes in
the senior management of the Company’s tenants, operators,
borrowers or managers; (y) the impact of litigation or any
financial, accounting, legal or regulatory issues that may affect
the Company or its tenants, operators, borrowers or managers; and
(z) changes in accounting principles, or their application or
interpretation, and the Company’s ability to make estimates and the
assumptions underlying the estimates, which could have an effect on
the Company’s earnings.
The Company routinely announces material information to
investors and the marketplace using press
releases, SEC filings, public conference calls, webcasts
and the Company’s website
at www.ventasreit.com/investor-relations. The information that
the Company posts to its website may be deemed to be material.
Accordingly, the Company encourages investors and others interested
in the Company to routinely monitor and review the information that
the Company posts on its website, in addition to following the
Company’s press releases, SEC filings and public
conference calls and webcasts. You may automatically receive e-mail
alerts and other information about the Company when you enroll your
e-mail address by visiting the “Sign up to Receive Email Updates”
section of the Company’s website
at www.ventasreit.com/investor-relations.
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Ventas, Inc.Ryan K. Shannon(877) 4-VENTAS
Ventas (NYSE:VTR)
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