Ventas to Acquire Nationwide Health Properties in $7.4B Deal

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.

"The combination of Ventas and NHP increases the scale and diversification of the combined company, the strength and flexibility of the company's balance sheet and the quality and geography of the assets," Cafaro said. "With Ventas's successful track record of value-creating transactions and NHP's longstanding history of regional, asset-level acquisitions, taken together with one of the strongest balance sheets in the REIT industry, the combined company will have a unique opportunity for continued external growth."

Pasquale called Ventas "the right partner" for Newport Beach, CA-based NHP. "Our shareholders, property operators and tenants will all benefit from our expanded strength, diversification and capabilities," he said. "We're pleased that this all-stock transaction offers NHP shareholders a premium and also the opportunity to participate in the combined company's future prospects for dividends and growth."

Among its   $5.1 Billion in healthcare real estate assets, NHP owns 667 properties in 42 states including

• 279 assisted and independent living
• 198 skilled nursing
• 134 medical office buildings