Senior Housing Properties Trust Agrees to Acquire Two Biotech Medical Office Buildings in Boston’s Seaport District for $1....
February 10 2014 - 5:20PM
Business Wire
State-of-the-Art Property Located in Premier
Boston Submarket
Transaction Expected to be Immediately
Accretive to Normalized FFO Per Share
Management to Host a Conference Call to Discuss
the Acquisition on Tuesday, February 11, 2014 at 10:00 a.m. Eastern
Time
Senior Housing Properties Trust (NYSE: SNH) today announced that
it has agreed to acquire two 15-story biotech medical office
buildings, which include a connected, three-level 740-stall below
grade parking garage, located in Boston’s premier Seaport District
for a purchase price of $1.125 billion.
The buildings, which comprise biomedical research facilities,
corporate office space, structured parking and street-level retail
space, contain 1.65 million total gross square feet, 96 percent of
which is occupied by Vertex Pharmaceuticals, Incorporated (NASDAQ:
VRTX), a global biopharmaceutical company. Vertex has a remaining
lease term of approximately 15 years for this new corporate
headquarters and is consolidating approximately 1,300 employees out
of ten buildings in Cambridge, MA. Vertex’s most recent Securities
and Exchange Commission (SEC) filed financial statements show $1.5
billion of cash and marketable securities and its current equity
market capitalization is approximately $19.0 billion; SNH believes
Vertex represents a strong credit tenant.
“The acquisition of this state-of-the-art property, which is
ideally located in Boston’s fastest growing downtown submarket and
one of the nation’s top investment markets, represents a unique
opportunity to further diversify SNH’s portfolio and increase our
exposure to the medical office building segment,” said David
Hegarty, President and Chief Operating Officer of SNH. “This
transaction is consistent with our stated strategy to focus on
medical office buildings and private-pay properties, and we expect
the transaction to be immediately accretive to normalized funds
from operations (FFO) per share. Post closing, SNH will remain
solidly-positioned with a strong balance sheet and committed to its
disciplined strategy of acquiring high-quality, premier properties
that create significant value for SNH shareholders.”
SNH expects this acquisition to be immediately accretive to
normalized FFO per share by approximately $0.06 -- $0.08 per
year.
Simultaneous with entering the agreement to acquire these
buildings, SNH received a term loan commitment for $800 million
from Jefferies Finance LLC and Wells Fargo Bank. The term loan will
have an interest rate of LIBOR plus 140 basis points, can be repaid
in part or whole at any time without penalty and will mature five
years from closing. Prior to closing the acquisition of these
buildings, the term loan is expected to be syndicated to a group of
banks, and the term loan is expected to close simultaneous with the
closing of this acquisition. The actual size of the term loan can
also be reduced depending on SNH’s funding needs at the time of
closing and without any additional costs to SNH. SNH also maintains
a $750 million unsecured revolving credit facility, which is
currently substantially available to partially fund this
acquisition at closing, if necessary.
SNH expects to long term finance this acquisition with an
appropriate mix of debt and equity capital, depending on the cost
of such financing and market conditions.
This acquisition is subject to customary closing conditions and
it is expected to close in the first half of 2014.
Jefferies Finance LLC acted as financial advisor to SNH for this
acquisition.
Conference Call:
On Tuesday, February 11, 2014, at 10:00 a.m. Eastern Time, David
J. Hegarty, President and Chief Operating Officer, and Richard A.
Doyle, Treasurer and Chief Financial Officer, will host a
conference call to discuss the details of the acquisition. A
presentation for this conference call will be posted to
www.snhreit.com and should be accessed
by participants prior to the call. SNH's website is not
incorporated as part of this press release. The conference call
telephone number is (800) 288-8960. Participants calling from
outside the United States and Canada should dial (612) 288-0340. No
pass code is necessary to access the call from either number.
Participants should dial in about 15 minutes prior to the scheduled
start of the call. A replay of the conference call will be
available through 11:59 p.m. Eastern Time, Tuesday, February 25,
2014. To hear the replay, dial (320) 365-3844. The replay pass code
is: 319046.
Senior Housing Properties Trust is a real estate investment
trust, or REIT, which owns independent and assisted living
communities, medical office buildings, nursing homes and wellness
centers throughout the United States. SNH is headquartered in
Newton, MA.
WARNING REGARDING
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD LOOKING STATEMENTS WITHIN
THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
AND OTHER SECURITIES LAWS. THESE FORWARD LOOKING STATEMENTS ARE
BASED UPON SNH'S CURRENT BELIEFS AND EXPECTATIONS, BUT THEY ARE NOT
GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS REASONS,
INCLUDING SOME WHICH ARE BEYOND SNH'S CONTROL. FOR EXAMPLE:
- THIS PRESS RELEASE DESCRIBED CERTAIN
EXPECTED TERMS OF AN $800 MILLION TERM LOAN WHICH SNH MAY INCUR IN
CONNECTION WITH THE ACQUISITION. THE COMMITMENTS WHICH SNH RECEIVED
FOR THE TERM LOAN ARE SUBJECT TO VARIOUS CONDITIONS, INCLUDING
MUTUALLY SATISFACTORY DOCUMENTATION. THERE CAN BE NO ASSUARANCE
THAT ALL THE CONDITIONS WILL BE SATISFIED, THAT THE TERMS OF THE
TERM LOAN WILL NOT CHANGE, OR THAT THE TERM LOAN WILL BE AVAILABLE
TO SNH. SNH IS NOT COMMITTED TO INCUR THE ENTIRE TERM LOAN OR ANY
PORTION THEREOF, AND MAY UTILIZE OTHER DEBT OR EQUITY FINANCING FOR
ALL OR A PORTION OF THE ACQUISITION.
- THIS PRESS RELEASE STATES THAT THE
ACQUISITION IS EXPECTED TO BE IMMEDIATELY ACCRETIVE TO NORMALIZED
FFO PER SHARE BY APPROXIMATELY $0.06 - $0.08 PER YEAR. THE
ACCRETION MAY BE MORE OR LESS THAN THAT RANGE, OR EVEN DILUTIVE ON
A NORMALIZED FFO PER SHARE BASIS, DEPENDING ON THE ACTUAL MIX OF
DEBT AND EQUITY FINANCING AND THE TERMS OF SUCH FINANCING.
- THIS PRESS RELEASE STATES THAT THE
INTEREST RATE UNDER THE TERM LOAN WILL BE LIBOR PLUS 140 BASIS
POINTS. THIS INTEREST RATE IS BASED ON SNH’S CURRENT DEBT RATINGS
AND THE INTEREST RATE MAY BE HIGHER OR LOWER THAN LIBOR PLUS 140
BASIS POINTS IN THE FUTURE DEPENDING ON SNH’S FUTURE DEBT
RATINGS.
- THIS PRESS RELEASE STATES THAT SNH
EXPECTS TO LONG TERM FINANCE THE ACQUISITION WITH AN APPROPRIATE
MIX OF DEBT AND EQUITY CAPITAL. THE ACTUAL MIX OF DEBT AND EQUITY
FINANCING WILL DEPEND ON THE AVAILABILITY AND COST OF SUCH
FINANCING, AND THE FINAL MIX OF FINANCING MAY BE DIFFERENT FROM
CURRENT EXPECTATIONS.
- THIS PRESS RELEASE STATES THAT THE
ACQUISITION IS EXPECTED TO CLOSE IN THE FIRST SIX MONTHS OF 2014;
HOWEVER, THE PURCHASE AGREEMENT CONTAINS VARIOUS CUSTOMARY CLOSING
CONDITIONS, AND TERMS THEREOF COULD CHANGE AND THE CLOSING COULD BE
DELAYED OR MAY NOT OCCUR AT ALL.
THE INFORMATION CONTAINED IN SNH’S FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION “RISK
FACTORS” IN ITS PERIODIC REPORTS, OR INCORPORATED THEREIN,
IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES
FROM ITS FORWARD LOOKING STATEMENTS. SNH’S FILINGS WITH THE SEC ARE
AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.
FOR THESE AND OTHER REASONS, INVESTORS ARE CAUTIONED NOT TO
PLACE UNDUE RELIANCE UPON FORWARD LOOKING STATEMENTS IN THIS PRESS
RELEASE.
EXCEPT AS REQUIRED BY APPLICABLE LAW, SNH DOES NOT INTEND TO
UNDERTAKE ANY OBLIGATION TO UPDATE THE FORWARD LOOKING STATEMENTS
IN THIS PRESS RELEASE AS A RESULT OF NEW INFORMATION WHICH MAY COME
TO SNH'S ATTENTION, FUTURE EVENTS OR OTHERWISE.
Senior Housing Properties TrustTimothy A. Bonang,
617-796-8234Vice President, Investor RelationsorKimberly Brown,
617-796-8234Director, Investor Relationswww.snhreit.comorJoele
Frank, Wilkinson Brimmer KatcherAndrew Siegel / Jonathan Keehner,
212-355-4449
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