Transaction to Generate Proceeds to MPT of $175 Million for an
Approximate 13% Unlevered IRR on 2012 Investment of $96 Million
BIRMINGHAM, Ala.--(BUSINESS WIRE)--May 30, 2018--
Medical Properties Trust, Inc. (“MPT” or the “Company”) (NYSE: MPW)
announced today that it has entered into definitive agreements with
affiliates of One Equity Partners (“OEP”) to sell its interest in Ernest
Health, Inc. (“Ernest”). Certain members of Ernest management also
agreed to sell the remaining Ernest interests to OEP. Upon closing MPT
expects its portion of proceeds to be $175 million and to generate an
approximate 13% unlevered internal rate of return on its original $96
million investment.
“One Equity’s investment in and commitment to Ernest validates the
investment in Ernest we made more than six years ago,” said Edward K.
Aldag, Jr., MPT’s Chairman, President, and Chief Executive Officer. “In
addition to the high IRR from our equity investment, we have created for
our shareholders an outstanding real estate portfolio of post-acute
hospitals that will continue to generate strong returns. Our investment
truly could not have worked out better for our shareholders.”
MPT will continue to own the real estate interests of 25 post-acute
hospitals operated by Ernest with an aggregate investment of
approximately $500 million, including mortgage loans aggregating $115
million secured by four hospitals. As part of the agreements, MPT has
granted Ernest an option to prepay the mortgage debt without penalty,
and Ernest has granted to MPT certain preferential rights to future real
estate acquisitions.
“We’re excited to be investing in Ernest Health. This transaction is the
result of years of work in the post-acute healthcare services market
including prior opportunities in long term acute care and inpatient
rehabilitation facilities,” said Greg Belinfanti, Senior Managing
Director at OEP. “The existing Ernest management team, with MPT’s
support, has built a tremendous company driven by a commitment to
clinical excellence and demonstrated positive patient outcomes. We plan
to build on this foundation and look forward to working with Ernest and
MPT leadership to accelerate Ernest’s already strong momentum.”
“Consistent with OEP’s investment strategy, we intend to support Ernest
with capital to pursue further acquisition, growth and development
opportunities,” said Brad Coppens, Managing Director at OEP. “Ernest has
spent over 14 years building a reputation for clinical excellence and we
hope to extend that reputation in partnership with health systems across
the U.S.”
Proceeds will be used to reduce borrowings under MPT’s revolving credit
facility. Closing of the transaction is subject to customary conditions,
including certain government approvals, and is expected during the
second half of 2018.
About Medical Properties Trust, Inc.
Medical Properties Trust, Inc. is a self-advised real estate investment
trust formed to capitalize on the changing trends in healthcare delivery
by acquiring and developing net-leased healthcare facilities. MPT’s
financing model helps facilitate acquisitions and recapitalizations and
allows operators of hospitals and other healthcare facilities to unlock
the value of their real estate assets to fund facility improvements,
technology upgrades and other investments in operations. Facilities
include acute care hospitals, inpatient rehabilitation hospitals,
long-term acute care hospitals, and other medical and surgical
facilities. For more information, please visit the Company’s website at www.medicalpropertiestrust.com.
About One Equity Partners
OEP is a middle-market private equity firm with approximately $7 billion
of assets under management focused on the industrial, healthcare, and
technology sectors in North America and Europe. The firm builds
market-leading companies by identifying and executing transformative
business combinations. OEP is a trusted partner with a differentiated
investment process, a broad and senior team, and an established track
record generating long-term value for its partners. Since 2001, the firm
has completed more than 170 transactions worldwide. OEP, founded in
2001, spun out of JP Morgan in 2015. The firm has offices in New York,
Chicago, and Frankfurt. For more information, please visit www.oneequity.com.
The statements in this press release that are forward looking are
based on current expectations and actual results or future events may
differ materially. Words such as "expects," "believes," "anticipates,"
"intends," "will," "should" and variations of such words and similar
expressions are intended to identify such forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause the actual results of the
Company or future events to differ materially from those expressed in or
underlying such forward-looking statements, including without
limitation: the satisfaction of all conditions to, and the timely
closing (if at all) of pending transactions; the amount of acquisitions
of healthcare real estate, if any; results from potential sales and
joint venture arrangements, if any; capital markets conditions;
estimated leverage metrics; the repayment of debt arrangements;
statements concerning the additional income to the Company as a result
of ownership interests in certain hospital operations and the timing of
such income; the payment of future dividends, if any; completion of
additional debt arrangements, and additional investments; national and
international economic, business, real estate and other market
conditions; the competitive environment in which the Company operates;
the execution of the Company's business plan; financing risks; the
Company's ability to maintain its status as a REIT for income tax
purposes; acquisition and development risks; potential environmental and
other liabilities; and other factors affecting the real estate industry
generally or healthcare real estate in particular. For further
discussion of the factors that could affect outcomes, please refer to
the "Risk factors" section of the Company's Annual Report on Form 10-K
for the year ended December 31, 2017 and as updated by the Company’s
subsequently filed Quarterly Reports on Form 10-Q and other SEC filings.
Except as otherwise required by the federal securities laws, the Company
undertakes no obligation to update the information in this press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180530005783/en/
Source: Medical Properties Trust, Inc.
Medical Properties Trust, Inc.
Tim Berryman, 205-969-3755
Director
– Investor Relations
tberryman@medicalpropertiestrust.com