Ventas To Buy American Realty Capital Healthcare In $2.6 Bln Cash-stock Deal

(RTTNews) - Real estate investment trust Ventas, Inc. (VTR) has agreed to acquire American Realty Capital Healthcare Trust, Inc.'s (HCT) all outstanding shares in a cash-stock deal worth $2.6 billion, or $11.33 per ARC Healthcare share.

In the transaction, ARC Healthcare shares would be generally converted to a fixed number of Ventas shares, based on a negotiated Ventas stock price of $67.13. In the transaction, ARC Healthcare shareholders would have the option to elect to receive either 0.1688 Ventas common shares or $11.33 in cash for each common share of ARC Healthcare they own. Based on the agreed upon Ventas stock price of $67.13, the deal's per share value represents a premium to ARC Healthcare shareholders of around 14 percent over ARC Healthcare's closing stock price on May 30, 2014.

Following the deal closure, ARC Healthcare shareholders are expected to own about eight percent of Ventas's 321 million common shares then outstanding. The transaction may close in the fourth quarter of 2014. The transaction may close in the third quarter of 2014.

Further, Ventas reported acquiring 29 independent living seniors housing communities located in Canada from Holiday Retirement for C$980 million, or around $900 million in cash. The closing of the purchase of 29 independent living communities from Holiday Retirement is expected to occur in the third quarter of 2014.

Currently, the Holiday portfolio is 90 percent occupied, with margins of approximately 50 percent in markets with above average income and senior population growth rates. Upon completion, the operations for the acquired seniors housing communities would be transitioned to Atria, which would manage a total of 173 communities for Ventas, including two unrelated communities that Ventas purchased after the first quarter.

The transactions are likely to be immediately accretive to Ventas's 2015 normalized Funds from Operations by at least $0.10 per share and have an expected unlevered yield of nearly six percent.