Healthcare Realty Trust Incorporated (NYSE:HR) (“Healthcare Realty”
or “HR”) and Healthcare Trust of America, Inc. (NYSE: HTA) ("HTA")
today provided an update on their previously announced $18 billion
strategic combination, creating the preeminent medical office
building REIT.
Healthcare Realty and HTA have received letters of intent from,
and are in advanced negotiations with, three institutional
investors for a combination of joint ventures and asset sales
totaling $1.7 billion at a weighted average cap rate of
approximately 4.8%. Net proceeds from these transactions would be
approximately $1.6 billion. The transactions may occur in separate
tranches, with the initial transactions targeted to close prior to
the vote on the merger by HR and HTA stockholders and the remainder
to be completed on or around the closing date of the merger. These
transactions are subject to execution of definitive documentation
and customary closing conditions.
“We are pleased to announce an important step forward in our
strategic combination with HTA. The proceeds from joint ventures
and asset sales at attractive prices will be used to fund the $1.1
billion special cash dividend to HTA stockholders and also
accretively fund future growth for the combined company,” stated
Todd Meredith, President and Chief Executive Officer of Healthcare
Realty.
In addition, Healthcare Realty and HTA have secured initial
commitments for amended and restated credit facilities, including
the following components:
- a $1.5 billion revolving credit facility;
- $1.5 billion of term loans, including $650 million of new
capacity; and
- a $1.1 billion asset sale term loan to replace the transaction
bridge loan commitment and to backstop the $1.1 billion special
cash dividend to HTA stockholders, if needed, depending on the
timing of asset sales and joint ventures.
Other than the asset sale term loan, the amended and restated
credit facilities are conditioned upon the closing of the merger.
Definitive documents are expected to be executed by mid-May.
Immediately following the merger closing, Healthcare Realty
expects to combine the surviving Healthcare Realty subsidiary with
HTA’s existing operating partnership to maintain an UPREIT
structure going forward. The UPREIT structure will align the
combined company's unsecured debt obligations in the operating
partnership and provide tax efficient strategies for future
acquisitions.
On May 2, 2022, Healthcare Realty and HTA filed a registration
statement and preliminary joint merger proxy statement with the
Securities and Exchange Commission (“SEC”). Assuming a customary
SEC review timeline, the Company and HTA expect to hold separate
special stockholder meetings on or about the same date in early to
mid-July for stockholders of record to vote on the merger. The
closing of the merger is expected to follow shortly thereafter.
On Thursday, May 5, 2022, at 11:00 a.m. Central Time, Healthcare
Realty expects to hold a conference call to discuss the updates
provided above along with first quarter earnings results, quarterly
activities, general operations of the Company, and industry
trends.
About Healthcare RealtyHealthcare Realty Trust
Incorporated (NYSE: HR) is a real estate investment trust that
integrates owning, managing, financing and developing
income-producing real estate properties associated primarily with
the delivery of outpatient healthcare services throughout the
United States. As of December 31, 2021, the Company was invested in
258 real estate properties in 23 states totaling 17.9 million
square feet and had an enterprise value of approximately $6.6
billion, defined as equity market capitalization plus the principal
amount of debt less cash. The Company provided leasing and property
management services to 14.3 million square feet nationwide.
About Healthcare Trust of America,
Inc.Healthcare Trust of America, Inc. (NYSE: HTA) is the
largest dedicated owner and operator of MOBs in the United States,
with assets comprising approximately 26.1 million square feet of
GLA, and with $7.8 billion invested primarily in medical office
buildings, as of December 31, 2021. HTA provides real estate
infrastructure for the integrated delivery of healthcare services
in highly-desirable locations. Investments are targeted to build
critical mass in 20 to 25 leading gateway markets that generally
have leading university and medical institutions, which generally
translates to superior demographics, highly-educated graduates,
intellectual talent and job growth. The strategic markets HTA
invests in support a strong, long-term demand for quality medical
office space. HTA utilizes an integrated asset management platform
consisting of on-site leasing, property management, engineering and
building services, and development capabilities to create complete,
state of the art facilities in each market. HTA believes this
drives efficiencies, strong tenant and health system relationships,
and strategic partnerships that result in high levels of tenant
retention, rental growth and long-term value creation.
Headquartered in Scottsdale, Arizona, HTA has developed a national
brand with dedicated relationships at the local level.
Forward Looking Statements This communication contains certain
“forward-looking” statements within the meaning of Section 27A of
the Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Exchange Act. HR and HTA intend such
forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995 and include this statement
for purposes of complying with the safe harbor provisions. Words
such as “expects,” “anticipates,” “intends,” “plans,” “believes,”
“seeks,” “estimates,” “will,” “should,” “may,” “projects,” “could,”
“estimates” or variations of such words and other similar
expressions are intended to identify such forward-looking
statements, which generally are not historical in nature, but not
all forward-looking statements include such identifying words.
Forward-looking statements regarding HR and HTA, include, but are
not limited to, statements related to the proposed transaction, and
the anticipated timing, benefits and financial and operational
impact thereof; the expected financing for the transaction; other
statements of management’s beliefs, intentions or goals; and other
statements that are not historical facts. These forward-looking
statements are based on each of the companies’ current plans,
objectives, estimates, expectations and intentions and inherently
involve significant risks and uncertainties. Actual results and the
timing of events could differ materially from those anticipated in
such forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks and
uncertainties associated with: HR’s and HTA’s ability to complete
the proposed transaction on the proposed terms or on the
anticipated timeline, or at all, including risks and uncertainties
related to securing the necessary shareholder approvals and
satisfaction of other closing conditions to consummate the proposed
transaction; the occurrence of any event, change or other
circumstance that could give rise to the termination of the
definitive transaction agreement relating to the proposed
transaction; risks related to diverting the attention of HTA and HR
management from ongoing business operations; failure to realize the
expected benefits of the proposed transaction; significant
transaction costs and/or unknown or inestimable liabilities; the
risk of shareholder litigation in connection with the proposed
transaction, including resulting expense or delay; the risk that
HR’s and HTA’s respective businesses will not be integrated
successfully or that such integration may be more difficult,
time-consuming or costly than expected; the ability to obtain the
expected financing to consummate the proposed transaction; risks
related to future opportunities and plans for the combined company,
including the uncertainty of expected future financial performance
and results of the combined company following completion of the
proposed transaction; effects relating to the announcement of the
proposed transaction or any further announcements or the
consummation of the proposed transaction on the market price of
HR’s or HTA’s common stock; the possibility that, if the Company
does not achieve the perceived benefits of the proposed transaction
as rapidly or to the extent anticipated by financial analysts or
investors, the market price of the Company’s common stock could
decline; general adverse economic and local real estate conditions;
the inability of significant tenants to continue paying their rent
obligations due to bankruptcy, insolvency or a general downturn in
their business; increases in interest rates; increases in operating
expenses and real estate taxes; changes in the dividend policy for
the Company’s common stock or its ability to pay dividends;
impairment charges; pandemics or other health crises, such as
COVID-19; and other risks and uncertainties affecting HR and HTA,
including those described from time to time under the caption “Risk
Factors” and elsewhere in HR’s and HTA’s Securities and Exchange
Commission (“SEC”) filings and reports, including HR’s Annual
Report on Form 10-K for the year ended December 31, 2021, HTA’s
Annual Report on Form 10-K and Form 10-K/A for the year ended
December 31, 2021, HTA’s registration statement on Form S-4 filed
with the SEC on May 2, 2022 that includes a joint proxy statement
of HR and HTA, and future filings and reports by either company.
Moreover, other risks and uncertainties of which HR or HTA are not
currently aware may also affect each of the companies’
forward-looking statements and may cause actual results and the
timing of events to differ materially from those anticipated. The
forward-looking statements made in this communication are made only
as of the date hereof or as of the dates indicated in the
forward-looking statements, even if they are subsequently made
available by HR or HTA on their respective websites or otherwise.
Neither HR nor HTA undertakes any obligation to update or
supplement any forward-looking statements to reflect actual
results, new information, future events, changes in its
expectations or other circumstances that exist after the date as of
which the forward-looking statements were made, except as required
by law.
Important Additional Information and Where to Find It
This communication relates to the proposed transaction pursuant
to the terms of the Agreement and Plan of Merger, dated February
28, 2022, by and among HR, HTA, Healthcare Trust of America
Holdings, LP, and HR Acquisition 2, LLC. In connection with the
proposed transaction, HTA has filed with the SEC a registration
statement on Form S-4 that includes a joint proxy statement of HR
and HTA and that also will constitute a prospectus of HTA.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT ON FORM S-4 AND THE RELATED JOINT PROXY
STATEMENT/PROSPECTUS, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO
THOSE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH
THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION, IF AND WHEN
THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT HR, HTA AND THE PROPOSED TRANSACTION. Investors
and security holders may obtain copies of these documents free of
charge through the website maintained by the SEC at www.sec.gov or
from HR at its website, www.healthcarerealty.com, or from HTA at
its website, www.htareit.com. Documents filed with the SEC by HR
will be available free of charge by accessing HR’s website at
www.healthcarerealty.com under the heading Investor Relations or,
alternatively, by directing a request to HR at
communications@healthcarerealty.com or 3310 West End Avenue, Suite
700, Nashville, Tennessee 37203, telephone: 615.269.8175, and
documents filed with the SEC by HTA will be available free of
charge by accessing HTA’s website at www.htareit.com under the
heading Investor Relations or, alternatively, by directing a
request to HTA at info@htareit.com or 16435 North Scottsdale Road,
Suite 320, Scottsdale, Arizona 85254, telephone 480.998.3478.
Participants in the Solicitation
HR and HTA and certain of their respective directors and
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies
from the common shareholders of HR and HTA in respect of the
proposed transaction under the rules of the SEC. Information about
HR’s directors and executive officers is available in HR’s proxy
statement dated March 25, 2022, for its 2022 annual meeting of
shareholders. Information about HTA’s directors and executive
officers is available in HTA’s Form 10-K/A dated April 12, 2022.
Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, are contained in the
joint proxy statement/prospectus and other relevant materials to be
filed with the SEC regarding the proposed transaction if and when
they become available. Investors should read the joint proxy
statement/prospectus carefully when it becomes available before
making any voting or investment decisions. You may obtain free
copies of these documents from HR or HTA using the sources
indicated above.
No Offer or Solicitation
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, 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 offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act.
HR Contacts |
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HTA Contacts |
Financial Contact: |
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Financial Contact: |
Kris Douglas, Chief Financial
Officer |
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Robert A. Milligan, Chief
Financial Officer |
P: 615.269.8175 |
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P:480.998.3478 |
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Media Contact: |
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Media Contact: |
Charles A. Koons / Elizabeth
Volpe |
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Andrew Siegel / Amy Feng |
Brunswick Group |
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Joele Frank, Wilkinson Brimmer
Katcher |
P: 212.333.3810 |
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P: 212.355.4449 |
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