[August 04, 2015] |
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Ventas and Equity Group Investments Announce Completion of Ardent Transactions
Ventas, Inc. ("Ventas"), Equity Group Investments ("EGI"), and
Ardent Health Services ("AHS") today announced the completion of their
previously reported transactions. Ventas has completed its acquisition
of AHS, and an EGI affiliate has completed its majority investment in a
newly capitalized hospital operating company, which will continue to be
branded "Ardent." The transactions were announced on April 6, 2015 and
July 7, 2015, respectively.
At closing, Ventas separated AHS' owned real estate from its hospital
operations, folding the real estate into the Ventas portfolio, and
spinning off AHS' hospital operations into a separate entity, Ardent.
Concurrently, an EGI-controlled entity acquired a majority stake in the
operations company, while Ventas retained a 9.9 percent interest and AHS
management retained a significant ownership stake.
Ardent's exceptional and experienced management team, under President
and Chief Executive Officer David Vandewater, will continue to lead the
operating company. He and his team were responsible for establishing AHS
as a premier provider of healthcare services and as one of the top 10
investor-owned hospital companies in the U.S. Ardent will continue
to provide high-quality healthcare services in three key service areas:
Amarillo, Texas; Tulsa, Oklahoma; and Albuquerque, New Mexico. The
portfolio includes 14 hospitals and three multi-specialty physician
groups. Ardent, which currently generates approximately $2 billion in
annual net revenues, will remain headquartered in Nashville with no
expected changes to its current operations.
"We are pleased to have completed our acquisition of Ardent Health
Services, a top 10 U.S. hospital operator with a strong financial and
operating profile," said Ventas Chairman and Chief Executive Officer
Debra A. Cafaro. "We are also delighted that EGI will be the majority
owner of the operating company. With Ardent's experienced,
well-respected management team and scalable platform, and EGI as our
partner, we are confident we can build a formidable business in the U.S.
hospital industry."
Sam Zell, Chairman of EGI, said, "America's large, highly fragmented
health care sector is experiencing an unprecedented consolidation phase.
The unique combination of Ventas, Ardent and EGI creates an exceptional
platform to deliver best-in-class health care services to Ardent's
patients."
David T. Vandewater, President and Chief Executive Officer of Ardent,
said, "We look forward to continuing to serve our existing patients,
physicians, employees and communities, and we are excited about the
prospects of entering new markets with our new capital partners."
Ventas's acquisition of AHS is expected to be immediately accretive to
Ventas's normalized funds from operations per share on a leverage
neutral basis.
About Ventas
Ventas, Inc., an S&P 500 company, is a leading real estate investment
trust. Its diverse portfolio of more than 1,600 assets in the United
States, Canada and the United Kingdom consists of seniors housing
communities, medical office buildings, skilled nursing facilities,
hospitals and other properties. 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. More information about Ventas and
Lillibridge can be found at www.ventasreit.com
and www.lillibridge.com.
About Equity Group Investments
Equity Group Investments, the private firm founded by Sam Zell over 45
years ago, specializes in opportunistic investments across the debt and
equity markets. EGI has extensive experience in energy, industrial,
manufacturing, logistics and transportation, business services,
communications, health care and real estate.
About Ardent Health Services
Ardent Health Services invests in quality health care. In people,
technology, facilities and communities, Ardent makes considerable
investments, producing high-quality care and extraordinary results.
Based in Nashville, Tenn., Ardent's subsidiaries own and operate acute
care health systems in three service areas - Amarillo, Texas; Tulsa,
Okla. and Albuquerque, N.M. - that include 14 hospitals and three
multi-specialty physician groups. For more information, go to www.ardenthealth.com.
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. These
statements include, but are not limited to, statements regarding the
benefits of the proposed transaction with AHS, including future
financial and operating results, statements regarding plans, objectives,
expectations relating to the proposed transaction and other statements
that are not historical facts. All statements regarding Ventas, Inc.
(the "Company") 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, 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 risk that the expected
benefits of the AHS transaction, including financial results, may not be
fully realized or may take longer to realize than expected; (b) risks
related to disruption of management's attention from ongoing business
operations due to the AHS transaction; (c) the effect of the
announcement of the AHS transaction on the Company's or Ardent's
relationships with their respective customers, tenants, lenders,
operating results and businesses generally; (d) 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; (e) 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; (f) 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, including investments in different asset types and outside
the United States; (g) 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; (h) 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;
(i) the extent of future or pending healthcare reform and regulation,
including cost containment measures and changes in reimbursement
policies, procedures and rates; (j) increases in the Company's borrowing
costs as a result of changes in interest rates and other factors; (k)
the ability of the Company's 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; (l)
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 capital
sources; (m) the Company's ability to pay down, refinance, restructure
or extend its indebtedness as it becomes due; (n) the Company's ability
and willingness to maintain its qualification as a REIT in light of
economic, market, legal, tax and other considerations; (o) final
determination of the Company's taxable net income for the year ended
December 31, 2014 and for the year ending December 31, 2015; (p) 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; (q) 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; (r) changes in exchange rates for any foreign currency in
which the Company may, from time to time, conduct business; (s)
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; (t) 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; (u) 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; (v) risks associated with the Company's MOB portfolio
and operations, including the Company's ability to successfully design,
develop and manage MOBs, to accurately estimate its costs in fixed
fee-for-service projects and to retain key personnel; (w) 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; (x)
the Company's ability to build, maintain and expand its relationships
with existing and prospective hospital and health system clients; (y)
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; (z) the impact of market or issuer events on the liquidity or
value of the Company's investments in marketable securities; (aa) merger
and acquisition 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; (ab) the impact
of litigation or any financial, accounting, legal or regulatory issues
that may affect the Company or its tenants, operators, borrowers or
managers; (ac) 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; (ad) uncertainties as to the completion and timing
of the Company's proposed spin-off transaction; and (ae) the impact of
the Company's proposed spin-off transaction on the Company's business.
Many of these factors are beyond the control of the Company and its
management.
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