Omega Healthcare Investors Agrees to Acquire MedEquities Realty Trust for $600M

A rendering of a planned senior living community on the Upper East Side of Manhattan. Omega and Maplewood Senior Living are developing the 23-story, 212,000-square-foot project.

HUNT VALLEY, MD. AND NASHVILLE, TENN. — Real estate investment trust Omega Healthcare Advisors (NYSE: OHI) has agreed to acquire MedEquities Realty Trust  (NYSE: MRT) in a cash and stock transaction valued at $600 million.

As part of the transaction, Omega will acquire the fee simple interest in 34 facilities operated by 11 operators in seven states. Omega will also acquire approximately $34 million in mortgage loans.

Under the terms of the transaction, MRT shareholders will receive $2 in cash and 0.235 OHI shares for each MRT share owned, which represents $10.26 per share based on Monday’s closing price for OHI.

The boards of directors for both companies have unanimously approved the transaction.

“This acquisition reinforces our commitment to the skilled nursing and senior housing industry, while adding new asset types to our portfolio furthering our strategic objectives,” says Taylor Pickett, CEO of Hunt Valley-based Omega. “MedEquities has built a high-quality diversified portfolio, which should provide Omega with meaningful future growth opportunities.”

Omega is a real estate investment trust that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. As of Sept. 30, 2018, Omega’s total portfolio consisted of 917 facilities spread across 41 states and the United Kingdom.

Headquartered in Nashville, MedEquities, is a self-managed real estate investment trust that invests in a mix of healthcare properties and healthcare-related real estate debt investments within the acute, post-acute and behavioral sectors of healthcare services.

Completion of the transaction is subject to satisfaction of customary closing conditions, including the approval by the stockholders of MedEquities. The transaction is expected to close in the first half of this year.

“This is a very compelling transaction for MedEquities’ stockholders,” says John McRoberts, CEO of MedEquities. “We believe going forward that our stockholders will be in an excellent position from having an investment in Omega’s diversified portfolio. Additionally, our operators will benefit from Omega’s depth of knowledge of the healthcare industry, its strong capital position and its commitment to support and grow with its tenants.”

 — David Cohen

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