HCP Announces £394.5 Million ($630 Million) Debt Investment In UK Care Home Portfolio
04 November 2014 - 1:05AM
Business Wire
HCP (NYSE:HCP) today announced that it is the lead investor in
the financing for Formation Capital and Safanad’s pending
acquisition of NHP, a company that owns 273 nursing and residential
care homes representing over 12,500 beds in the UK. HCP will
provide a loan facility (the “Facility”) totaling
£394.5 million (approximately $630 million), secured by
substantially all of NHP’s assets with a five–year term. The
Facility includes £362.5 million funded at closing,
representing a portion of the £477 million acquisition
consideration; in addition, HCP will make available up to
£32 million to fund future capital improvements in properties
operated by HC–One described below. Including fees received at
closing, the Facility is projected to achieve a blended 8.2%
yield–to–maturity, representing an immediately accretive investment
that increases HCP’s annualized FFO and FAD run-rate by $0.03 per
share.
The NHP portfolio is anchored by 226 care homes, the majority of
which are purpose–built, primarily located in England and Scotland.
These facilities are operated by HC–One, an NHP subsidiary launched
in November 2011 to assume the operations transitioned from
Southern Cross Healthcare. HC–One is the UK’s third largest nursing
and residential care provider with an experienced management team
led by Dr Chai Patel, and cares for over 10,000 residents by
offering a wide range of services including dementia, nursing,
residential and specialist care. The remaining NHP facilities are
leased to third–party operators including Four Seasons Health Care
and Care Management Group. Currently NHP’s portfolio has an
occupancy rate of over 88%.
“We are pleased to partner with Formation Capital and Safanad to
finance its acquisition of NHP,” said Lauralee Martin, President
and CEO of HCP. “Formation has been a valuable partner to HCP,
having collaborated on past transactions including our Genesis and
Tandem debt investments, as well as several Senior Housing
development projects. Further, this accretive transaction allows us
to expand our UK investments to approximately $1 billion and
provides a new relationship with a premier national operator in the
UK led by Dr Chai Patel and his talented management team.”
The closing of the acquisition and funding of the Facility is
expected to occur in November 2014, subject to customary closing
conditions.
About HC–ONE
Created by NHP and Court Cavendish in 2011, HC–One is the third
largest care home operator in the UK, providing Dementia, Nursing,
Residential and Specialist care for over 10,000 residents with over
14,000 members of staff. Founded on the principles of involvement,
accountability and partnership, HC–One stands for ‘Health’ and
‘Care’ and symbolises the focus on the “one.” HC–One is committed
to continuing to build a new kind of relationship between the
staff, residents, relatives and the wider communities within which
it operates. For more information regarding HC–One, visit the
company’s website at http://www.hc-one.co.uk/.
About HCP
HCP, Inc. is a fully integrated real estate investment trust
(REIT) that invests primarily in real estate serving the healthcare
industry in the United States. HCP's portfolio of assets is
diversified among five distinct sectors: senior housing,
post-acute/skilled nursing, life science, medical office and
hospitals. A publicly traded company since 1985, HCP: (i) was the
first healthcare REIT selected to the S&P 500 index; (ii) has
increased its dividend per share for 29 consecutive years; (iii) is
the only REIT included in the S&P 500 Dividend Aristocrats
index; and (iv) is a global leader in sustainability as a member of
the CDP, Dow Jones and FTSE4Good sustainability leadership indices,
as well as the GRESB Global Healthcare Sector Leader. For more
information regarding HCP, visit the Company's website at
www.hcpi.com.
Forward–Looking Statements
“Safe Harbor” Statement under the Private Securities Litigation
Reform Act of 1995: The statements made by or on behalf of HCP in
this release or relating hereto which are not historical facts are
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These statements
include, among other things, statements regarding anticipated
outcomes relating to the proposed debt investment. These statements
are made as of the date hereof, are not guarantees of future
performance and are subject to known and unknown risks,
uncertainties, assumptions and other factors — many of which are
out of HCP’s control and difficult to forecast — that could cause
actual results to differ materially from those set forth in or
implied by such forward-looking statements. These risks and
uncertainties include but are not limited to: HCP’s ability to
complete or achieve the benefit of the investment described above
on the proposed terms or at all; risks relating to the acquisition
of NHP by Formation Capital, including in respect of the timing and
satisfaction of closing conditions, unanticipated difficulties
relating to the acquisition, the risk that regulatory approvals
required for the acquisition are not obtained or are obtained
subject to unanticipated conditions, litigation relating to the
acquisition, and the parties’ inability to obtain, or delays in
obtaining, cost savings and synergies from the acquisition; the
ability of operators, tenants and borrowers, including Formation
Capital, to conduct their respective businesses in a manner
sufficient to maintain or increase their revenues and to generate
sufficient income to make payments to HCP, and HCP’s ability to
recover its investment; and other risks and uncertainties described
from time to time in HCP’s Securities and Exchange Commission
filings, including its 2013 Annual Report on Form 10-K. HCP assumes
no, and hereby disclaims any, obligation to update any of the
foregoing or any other forward-looking statements as a result of
new information or new or future developments, except as otherwise
required by law.
HCP, Inc.Timothy M. SchoenExecutive Vice President &
Chief Financial Officer(949) 407-0400investorrelations@hcpi.com
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