06/02/2014 | By Sarah Borchersen-Keto
Ventas, Inc. (NYSE: VTR) said June 2 it has agreed to purchase American Realty Capital Healthcare Trust, Inc. (NASDAQ: HCT) in a stock and cash transaction valued at $2.6 billion.
Under the terms of the agreement, ARC Healthcare shareholders will have the option to receive either 0.1688 Ventas common shares or $11.33 in cash for each share of ARC Healthcare stock they own, representing a premium of approximately 14 percent over ARC Healthcare’s closing stock price on May 30.
ARC Healthcare was created in 2011 as a public non-listed REIT, and its stock began trading April 7 on the NASDAQ Global Select Market.
Nicholas Schorsch, executive chairman of ARC Healthcare, said the agreement allows ARC Healthcare shareholders to participate in the future growth “of what will become the largest, and in my view, best managed health care REIT and sixth largest overall REIT in the country.”
He described Ventas as an “ideal strategic partner” because of its broad portfolio, history of value creation and “extraordinary” record of dividend growth. The transaction is expected to close in the fourth quarter of 2014.
Ventas also announced it will acquire 29 independent living senior housing communities located in Canada from Holiday Retirement in a separate transaction for approximately $900 million in cash. The deal is expected to close in the third quarter of 2014.
The Holiday portfolio is currently 90 percent occupied, with margins of approximately 50 percent in markets with above average income and senior population growth rates.
“These acquisitions are consistent with our stated strategy to be the leading owner of healthcare and senior living properties globally, and position Ventas to continue to deliver growth and consistent superior returns to our shareholders,” said Debra Cafaro, Ventas chairman and CEO. "With the addition of ARC Healthcare and the Canadian seniors housing communities, we are continuing our focus on private pay assets, expanding our industry-leading medical office building (MOB) footprint and international presence," she added.