Ventas, Inc. will acquire Nationwide Health Properties, Inc. in an all-stock transaction valued at $7.4 billion that – when completed – will create the nation's largest publicly traded real estate investment trust, the two REITs announced jointly Monday.
The board of directors at both REITs unanimously approved the definitive agreement, under which Chicago-based Ventas will acquire all of the outstanding shares of NHP in a stock-for-stock transaction that would be the equivalent to $44.99 of Ventas stock for each NHP share, which represents a premium of about 15% over NHP's closing price on Friday.
The combined company will have more than 1,300 assets in 47 states, the District of Columbia, and two Canadian provinces, which represents approximately $17 billion in equity value, and an enterprise value of approximately $23 billion, the two REITs said.
Ventas shareholders are expected to own approximately 65% of the combined company, and NHP shareholders are expected to own approximately 35%. The transaction is expected to be immediately accretive to Ventas's normalized funds from operations and funds available for distribution after the closing, which is expected to occur in the third quarter of 2011, the REITs said.
Ventas Chairman/CEO Debra A. Cafaro will be chairman/CEO of the combined company. Douglas M. Pasquale, NHP's chairman/president/ CEO, will serve as a senior advisor during the transition. When the deal is finalized, the Ventas board will be expanded to include three directors from NHP, including Pasquale, bringing the total to 13 members. The REIT will continue to be headquartered in Chicago.