BIRMINGHAM, ALA. — Medical Properties Trust Inc. (NYSE: MPW) has entered into a definitive agreement to acquire real estate and operations of Capella Holdings Inc. (Capella), a privately owned hospital company headquartered in Franklin, Tenn., for $900 million.
The $900 million total value of the transactions comprises a $600 million investment in Capella’s real estate, including the acquisition of seven hospitals, and an approximate $300 million investment in Capella’s operating entities, which is expected to be owned jointly by Birmingham, Ala.-based MPT and Capella management.
“The acquisition of Capella, which in a single stroke accretively increases our portfolio of high-quality hospital real estate by nearly 20 percent, is simply the next step along our track record of creating strong double-digit growth,” says Edward Aldag Jr., chairman, president and CEO of MPT.
With the acquisition, MPT will be adding to its acute care portfolio seven hospitals located in five states, with an aggregate 1,169 beds and more than 2 million square feet. MPT’s interest in the hospitals will be subject to sale-leaseback and mortgage loan arrangements.
Following the acquisition, acute care facilities as a percentage of MPT’s portfolio will increase to 62 percent globally and 74 percent in the United States. The initial lease term will be 15 years with four 5-year renewal options.
MPT and Capella’s senior management have also agreed to form a joint venture that will become the purchaser of Capella’s operating entities for a total consideration of approximately $300 million, including a loan or other investment by MPT of approximately $290 million.
Capella is one of the 10 largest for-profit acute care hospital operators in the United States based on revenue. Capella owns and operates acute care and specialty hospital facilities in six states.
MPT is a healthcare REIT with assets approaching $5.5 billion. MPT’s stock price closed at $13.80 per share on Monday, July 27, up from $13.62 per share a year ago.
— Scott Reid