Annou Medical Properties Trust – GuruFocus.com
Medical Properties Trust, Inc. (the “Company” or “MPT”) (NYSE: MPW) today announced that a subsidiary of LifePoint Health, Inc. (“LifePoint”) has agreed to acquire a controlling interest in Springstone Health Opco, LLC (“Springstone”) from the current management group based on an enterprise value of $250 million.
In October 2021, MPT invested approximately $190 million, primarily in the form of a loan, and received a minority stake in Springstone as part of its $760 million acquisition of 18 behavioral hospitals. Consistent with the expected closing of the LifePoint transaction in the first half of 2023, MPT expects to receive approximately $200 million in full settlement of the loan and will retain its minority stake, providing MPT shareholders with a continued opportunity to participate in a new creation valuable. MPT will continue to own and lease Springstone Behavioral Hospitals. Additionally, to more fully align MPT with its operations, LifePoint has agreed to extend the maturity of its existing eight general acute care hospital head lease by five years to 2041.
This anticipated transaction illustrates the distinct competitive advantage inherent in MPT’s ability to successfully secure hospital operations. It has again been shown that:
- MPT can competently and confidently execute “WholeCo” transactions in the interest of acquiring hospital real estate. This competitive advantage has often allowed MPT to acquire critical infrastructure within platforms that other investors are challenged to underwrite.
- MPT can opportunistically divest “OpCo” investments to well-capitalized operators with significant scale advantages and promising growth strategies. Similar to the recent merger of Priory Group and MEDIAN, which created a leading comprehensive rehabilitation platform in the UK and Germany, LifePoint and Springstone will combine clinical and financial resources to improve care, financial performance and potential. future growth. MPT expects this to provide additional long-term support to its combined General Acute and Behavioral portfolio which will be operated by LifePoint.
- MPT can generate quietly profitable returns over “OpCo” investment holding periods. Similar to MPT’s historical investments in Ernest, MEDIAN, Capella, ATOS International and others, a highly accretive unleveraged internal rate of return is expected to be realized upon closing of the LifePoint transaction. On a stand-alone basis, the Company’s role in temporarily capitalizing talented operators has been and should continue to be an occasional source of profit with limited downside.
Completion of the transaction is subject to customary closing conditions. MPT cannot guarantee that transactions will be completed successfully as described above or at all.
Goodwin Procter and Baker Donelson PC are acting as legal advisors to MPT and Springstone in connection with this transaction, and Guggenheim Securities, LLC is acting as financial advisor to MPT. Bradley is also acting as Springstone’s legal counsel.
About Medical Properties Trust, Inc.
Medical Properties Trust, Inc. is a self-managed real estate investment trust established in 2003 to acquire and develop net-lease hospital facilities. Since its founding in Birmingham, Alabama, the company has grown to become one of the world’s largest owners of hospital real estate with 447 facilities and approximately 46,000 licensed beds in ten countries and on four continents. MPT’s financing model facilitates acquisitions and recapitalizations and allows hospital operators to unlock the value of their real estate assets to fund facility improvements, technology upgrades and other operations investments. For more information, please visit the Company’s website at www.medicalpropertiestrust.com.
This press release contains 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. Forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “could”, “might”, “expect”, “intend”, “plan”. , “estimate”, “target”, “anticipate”, “believe”, “goals”, “outlook”, “direction” or other similar words, and include statements regarding our strategies, objectives, business future expansion and development and our expected financial performance. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results or future events to differ materially from those expressed in or underlying such forward-looking statements, including, but not limited to: ( i) economic, political conditions and social impact and uncertainty related to the potential impact of health crises (such as COVID-19); (ii) the ability of our tenants, operators and borrowers to fulfill their obligations under their respective contractual agreements with us, including due to the negative economic impact of the COVID-19 pandemic, and government regulation of hospitals and health care providers in connection with the same (as detailed in our current report on Form 8-K filed with the SEC on April 8, 2020); (iii) our expectations regarding annual forecast net income and NFFO per share; (iv) our success in implementing our business strategy and our ability to identify, underwrite, finance, complete and integrate acquisitions and investments; (v) the nature and extent of our current and future competition; (vi) macroeconomic conditions, such as disruption or lack of access to capital markets or currency exchange rate fluctuations; (vii) our ability to obtain debt financing on attractive terms or not at all, which could adversely impact our ability to pursue acquisition and development opportunities and to repay, refinance, restructure or extend our debt at maturity; (viii) increases in our borrowing costs due to changes in interest rates and other factors; (ix) economic, real estate and other international, national and local market conditions, which may adversely impact, among other things, the financial condition of our tenants, lenders and institutions that hold our cash balances, and may expose us to increased risks of default by these parties; (x) factors affecting the real estate industry generally or the healthcare real estate industry specifically; (xi) our ability to maintain REIT status for federal and state income tax purposes; (xii) federal and state health care and other regulatory requirements, as well as those of foreign jurisdictions where we have properties; (xiii) the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or to obtain or maintain equity or debt financing secured by our properties or on an unsecured basis; (xiv) the ability of our tenants and operators to comply with applicable laws, rules and regulations in the operation of our properties, to provide high quality services, to attract and retain qualified personnel and to attract patients; (xv) potential environmental contingencies and other liabilities; (xvi) the risk that LifePoint’s planned acquisition of a controlling interest in Springstone will not occur; and (xvii) the risk that further asset sales, loan repayments and other capital recycling transactions will not occur.
The risks described above are not exhaustive and additional factors could adversely affect our business and financial performance, including the risk factors discussed in the section entitled “Risk Factors” in our Annual Report on Form 10. -K for the year ended December 31, 2021 and updated in our quarterly reports on Form 10-Q. Forward-looking statements are inherently uncertain, and actual performance or results may differ materially from any forward-looking statements and from the assumptions on which such statements are based. Readers are cautioned not to place undue reliance on forward-looking statements as predictions of future events. We disclaim any responsibility to update these forward-looking statements, which speak only as of the date they were made.
See the source version on businesswire.com: https://www.businesswire.com/news/home/20220828005040/en/