US-based Ventas has entered an agreement to acquire healthcare services provider Ardent Medical Services for $1.75bn in cash.
Under the deal, Ardent will be entitled to provide up to $75m in excess cash to its existing shareholders. It is owned by private equity funds managed by Welsh, Carson, Anderson & Stowe.
Based in Nashville, Tennessee, Ardent and its subsidiaries own and operate health systems in major markets in the US, which generates $2bn in annual revenues.
Ventas chairman Debra Cafaro said: "This transaction builds upon our excellent track record of executing innovative and value-creating opportunities, and solidifies our leadership position in healthcare real estate.
"The addition of Ardent’s platform, which includes high-quality assets with significant market share in three key markets, and a highly-regarded hospital management team, creates a strong avenue for growth in the attractive hospital real estate market."
As part of the deal, Ventas will acquire ten hospitals operated by Ardent under the names BSA Health System in Amarillo, Texas, Hillcrest HealthCare System in Tulsa, Oklahoma and Lovelace Health System in Albuquerque, New Mexico.
With 3,200,000ft² and 2,045 beds, the assets being acquired include acute care, heart, rehabilitation and women’s health hospitals.
Subject to receipt of regulatory approvals and certain specified closing conditions, the deal is expected to be completed in the middle of 2015.
Upon closing the deal, Ventas plans to separate Ardent hospital operations from its owned real estate and sell the hospital operations to one or more newly formed entities owned by the current management of Ardent.
In addition, Ventas unveiled plans to spin off its post-acute / skilled nursing facility (SNF) portfolio into an independent and publicly traded real estate investment trust (REIT), SpinCo.
SpinCo will own 355 triple-net leased SNFs and other healthcare assets operated by 44 private regional and local care providers, spanning 37 states.