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Ventas to Provide Financing for Ardent's Purchase of LHP


Trades from $3

Ventas, Inc. (VTR - Analyst Report) , the Chicago, IL-based healthcare real estate investment trust (“REIT”) has committed to offer debt financing worth $700 million to a subsidiary of Ardent Health Services. This secured financing has been arranged in association with Ardent’s agreement to acquire LHP Hospital Group, Inc, the terms and conditions of which have not been disclosed yet.

Notably, a substantial part of Ardent’s current real properties is owned by Ventas, which includes 10 of the 14 hospitals and related medical facilities. In fact, Ardent is owned by an affiliate of Equity Group Investments (EGI), Ardent management and Ventas.

Subject to the satisfaction of certain customary closing conditions, the acquisition is slated to close in first-quarter 2017. In order to close the transaction, Ventas is providing LIBOR-based loan. The loan has a term period of five years and is secured by the parent company of Ardent. The initial rate of interest has been set at around 8%.  Apart from this secured financing, Ardent’s majority owner, an affiliate of EGI, will also infuse equity capital for the purchase of LHP.

Ardent and LHP have inked a definitive merger agreement under which the two entities will merge their operations. The deal will create the second largest private, for-profit hospital operator in the U.S. with $3 billion in revenues and 19 hospitals, located across six states.

Ventas currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space include CorEnergy Infrastructure Trust, Inc. (CORR - Snapshot Report) , Crown Castle International Corp. (CCI - Analyst Report) and Seritage Growth Properties (SRG - Snapshot Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Current-quarter estimates for both Crown Castle International and Seritage Growth Properties moved up over the past one month.

CorEnergy Infrastructure Trust’s current-quarter estimates remained stable over the last month.

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