Medical Properties Trust has concluded its previously announced sale of five healthcare facilities in the US to Prime Healthcare for an aggregate consideration of $350m.
According to a Medical Properties Trust’s press release, the initial deal between the two companies to sell the facilities was signed in February this year and was subject to receipt of certain customary conditions and notice provisions.
The sold facilities include Saint Francis Medical Center in Lynwood in California along with four facilities within the St. Clare’s system in New Jersey.
Under the terms of this deal, Prime Healthcare was required to pay $250m in immediate cash to Medical Properties Trust and $100m in the form of interest-bearing mortgage note due in the next nine months.
Prime Healthcare operates a network of 45 hospitals and more than 300 outpatient facilities across 14 states in the US.
Apart from this sale, Prime Healthcare and Medical Properties Trust have also finalised a new 20-year master lease agreement for the remaining four hospitals leased to Prime Healthcare.
This agreement includes a $260m purchase option, enabling Prime to repurchase the properties at any time.
To incentivise an early exercise of the purchase option as part of the new lease term, a reduced price of $238m is set if actioned on or before 26 August 2028, after which the price will revert to $260m and is currently subject to annual increases.
Medical Properties Trust, established in 2003, is a self-advised real estate investment trust, which was established mainly to acquire and set up net-leased hospital facilities.
As of 31 December 2023, the company features ownership of as many as 439 facilities along with approximately 43,000 licensed beds located across nine countries and three continents.
According to Medical Properties Trust, its financial model is designed to support hospital operators by unlocking the value of their real estate, thereby facilitating improvements and investments in operations.
In June 2021, Medical Properties Trust entered into definitive agreements with Tenet Healthcare to acquire five general acute care hospitals in South Florida, US in an approximately $900m deal.
