July 30, 2015
Mike Hargrave

Medical Properties Trust to Buy Capella Healthcare

Medical Properties Trust (NYSE: MPW) has recently announced they were acquiring the real estate of seven hospitals as well as an interest in the operations of Capella Healthcare in a transaction valued at $900 million. The deal is split two-thirds ($600 M) to real estate and one-third to operations. The deal represents the single largest transaction in MPW’s history and will grow their real estate asset base (based on 1Q15 gross real estate assets) by some 19%. The deal also ranks as the second largest hospital real estate deal of YTD 2015 behind Ventas’ $1.4 B (real estate) acquisition of Ardent Health Services. According to MPW, here are some of the metrics surrounding the deal:

MPW Acquisition Roadshow Presentation (Aug 2015) v55 FINAL_Page_03

 

 

 

 

 

 

 

 

 

 

 

MPW provided good color on the deal so we can compare the metrics to the VTR/Ardent deal and Revista averages over the past 12 months. Please visit www.medicalpropertiestrust.com for more color on the deal.

HospitalREDeals1

 

 

 

 

 

 

 

 

1. VTR/Ardent deal included hospitals and “related real estate” which may distort some of the metrics presented.

2. Price paid for real estate only, excludes operations

3. Yield represents the going in cash yield which is estimated for the MPW/Capella deal. MPW reported the GAAP yield at 9.1%. Cash yields are generally 20-50 bps lower than GAAP.