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Ventas Pays $3.5 Billion to Bolster Real Estate Portfolio

NEW YORK (The Deal)-- Leading real estate investment trust Ventas (VTR), of Chicago, has made two acquisitions to expand its position in senior living and medical office buildings.

Ventas will pay $2.6 billion in stock and cash to acquire all outstanding shares of New York-based American Realty Capital Healthcare Trust (HCT). In a separate transaction, about $900 million cash for 29 Canada-based senior housing communities from Holiday Retirement, Ventas said June 2.

The deals should be immediately accretive to 2015 revenue by at least $0.10 per share, with an expected yield of about 6%, Ventas said.

"We are continuing our focus on private pay assets, expanding our industry-leading [medical office building] footprint and international presence and increasing our diversification while maintaining a strong credit profile and balance sheet," Ventas Chairman and CEO Debra Cafaro said in a prepared statement.

Ventas will pay about $11.33 per ARC Healthcare share. At the close of the transaction, ARC shareholders can elect to receive 0.1688 Ventas common shares or $11.33 in cash for each share of ARC stock they own. Ventas' cash outlay for the deal is capped at 10% of ARC's outstanding common stock.

Assuming the 10% cash election, at close, ARC shareholders are expected to own roughly 8% of Ventas' 321 million shares of common stock, currently valued at $1.8 billion. Nicholas Schorsch, executive chairman at ARC, said the management team there "has elected to take all consideration for this transaction in the stock of the combined company."

The ARC transaction is expected to close in the fourth quarter, conditioned on ARC shareholder approvals and satisfaction of customary closing conditions.

Boards of the two companies have unanimously approved the deal.

Both acquisitions, Cafaro noted, are consistent with Ventas' stated strategy to be the leading owner of healthcare and senior living properties globally.

Its purchase of 29 independent living senior housing communities in Canada from Holiday Retirement, based in Lake Oswego, Ore., is expected to close in the third quarter.

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