Medical Residence Trust Inc. (NYSE: MPW) consented to obtain the real estate interests of 10 acute care hospitals and one behavioral health facility presently run by IASIS Health care and to be run by Steward Health Care System LLC when the transaction is completed.
Steward and IASIS at the same time revealed a merger deal, completion of which is a condition of MPT’s investment. MPT is also making a $100 million chosen equity financial investment in Steward.
Nine healthcare facilities will be purchased for $700 million and rented back to Steward under a master lease, which has an expiration date of October 2031, and includes three 5-year extension terms.
Birmingham, AL-based MPT will likewise acquire two new mortgage, also aggregating $700 million. The home loans have the same contractual terms as the leases.
With the new financial investment, MPT’s overall investment in Steward property will total $3.3 billion, that includes MPT’s existing investment in healthcare facility real estate leased to IASIS.
MPT anticipates to fund the acquisitions with profits from a mix of a completely devoted $1 billion term loan with a term up to two years, its revolving credit center with present accessibility of roughly $1 billion and the possible issuance of long-lasting unsecured notes.
The deal will increase MPT’s overall assets by around 20% to nearly $9 billion. Even more, it includes 11 hospitals and over 2,400 beds to MPT’s portfolio, increasing the total number to 269 and 31,266, respectively.
Its percentage of intense care hospitals increases to 72.5% of MPT’s total portfolio and 84% of the U.S. portfolio, a boost from 66.9% and 79.9%, respectively.
” We are extremely delighted about this opportunity to grow with among the leading health center operators in the nation,” said Edward K. Aldag, Jr., MPT’s chairman, president and CEO.
The merger of Steward and IASIS will create the largest private for-profit healthcare facility operator in the United States with projected earnings of almost $8 billion in 2018, the very first complete year of combined operations.
The property investments to be made consist of the following.Hospital, Area, Form of Financial investment, Accredited Beds
Davis Medical facility and Medical Center, Layton, UT, Home mortgage, 220
Jordan Valley Medical Center, West Jordan, UT, Mortgage, 171
Odessa Regional Medical Center, Odessa, TX, Lease, 225
Salt Lake Regional Medical Center, Salt Lake City, UT, Lease, 158
St. Luke’s Medical Center, Phoenix, AZ, Lease, 219
St. Luke’s Behavioral University hospital, Phoenix, AZ, Lease, 124
Southwest General Health center, San Antonio, TX, Lease, 327
Wadley Regional Medical Center at Hope, Hope, AR, Lease, 79
Tempe St. Luke’s Health center, Tempe, AZ, Lease, 87
St. Joseph Medical Center, Houston, TX, Lease, 790
Mountain Point Medical Center, Lehi, UT, Lease, 40
The deal is anticipated to nearby Sept. 30, 2017, based on customary approvals and authorizations.