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TOLEDO, OH-Health Care REIT Inc. has agreed to purchase Indianapolis-based Windrose Medical Properties Trust for approximately $877 million, including the assumption of Windrose's outstanding debt which totaled approximately $426 million as of June 30.
According to company documents, the merger will create a company with investments throughout the healthcare delivery system with more than 550 properties in 37 states. The combined entity would have gross real estate assets of approximately $4 billion and an enterprise value of approximately $5 billion based on the closing prices of both Health Care REIT and Windrose's stocks on Sept. 12.
In a call outlining the deal, George Chapman, chief executive officer of Health Care, said the company will build a new asset class in response to the aging baby boomers. With inventory in California leading the charge, the company will also have a high concentration in Texas.
Once the transaction is completed, Windrose will become a division of Health Care REIT. Fred Klipsch, Windrose CEO, and Fred Farrar, Windrose president and COO, will head up the new division.
Under the terms of the agreement, each outstanding share of Windrose will be exchanged for 0.45 shares of Health Care REIT common stock. At yesterday's closing prices, this represents a price of $18.06 for each Windrose share. Upon closing, Windrose stockholders will own approximately 15% of Health Care REIT, assuming conversion of all of the outstanding Windrose convertible preferred stock.
The transaction is expected to close on or about year-end 2006, subject to the approval of the stockholders of Windrose. Completion of the transaction does not require approval of Health Care REIT stockholders. Deutsche Bank Securities acted as exclusive financial advisor to Health Care REIT and JPMorgan acted as exclusive financial advisor to Windrose.
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