Omega Healthcare to Acquire MedEquities Realty in $600M Deal

HUNT VALLEY, MD–Locally-based Omega Healthcare Investors is acquiring Nashville-based MedEquities Realty Trust in a stock transaction that values MedEquities at $600 million.

The boards of directors of both companies have unanimously approved the transaction. There are no changes planned to Omega’s board of directors or executive officers related to the merger transaction.

Under the terms of the agreement, MedEquities stockholders will receive a fixed exchange ratio of 0.235 Omega common shares plus $2.00 in cash for each share of MedEquities common stock, which represents a value of $10.26 per MedEquities share based on the $35.15 closing price for Omega common stock on December 31, 2018.

Separately, MedEquities will declare a special cash dividend of $0.21 per share payable to the holders of MedEquities common stock.

This is a diversification play for Omega as well as an opportunity for growth, according to CEO Taylor Pickett. The acquisition also reinforces the company’s commitment to the skilled nursing and senior housing industry, he said.

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 2019. The transaction is not subject to approval by Omega’s stockholders and is not subject to any financing contingency.

Bryan Cave Leighton Paisner LLP is serving as legal advisor to Omega. Morrison & Foerster LLP is serving as legal advisor and Citigroup Global Markets Inc. is serving as exclusive financial advisor to MedEquities.