PR Newswire
TORONTO, Nov. 17, 2017
TORONTO, Nov. 17, 2017 /PRNewswire/ - Mainstreet Health Investments (TSX: HLP-U) ("Mainstreet" or the "Company") today announced that it has entered into definitive agreements with Tiptree Inc. (NASDAQ: TIPT) ("Tiptree") and certain subsidiaries, to acquire Care Investment Trust LLC ("CareIT") (the "Transaction") for an aggregate purchase price of approximately US$425 million (the "Consideration"). CareIT owns a portfolio of 42 seniors housing and care properties comprising 3,718 suites/beds in attractive markets across the United States (the "Portfolio"). Furthermore, Mainstreet intends to change its operating name to Invesque Inc., which will provide the Company with a unique and recognizable name.
Transformative and Strategic Acquisition
Scott White, the Company's CEO stated, "We are excited to announce the acquisition of CareIT and deliver on our strategic plan to grow our platform, diversify our portfolio and provide significant value for our shareholders. We believe this transaction and the addition of Tiptree as another cornerstone investor will bolster our position in the market and position Mainstreet for the next phase of its growth. This transaction is further evidence of the embedded value in our platform, with a sophisticated investor making a significant investment in our Company."
Rick Turner, the Company's Chairman added, "This transaction is a significant achievement for our company and we are excited to announce this acquisition as we continue to deliver on our growth strategy. We expect to continue acquiring high quality properties with strong operators in growing markets."
Michael Barnes, Tiptree's Executive Chairman stated, "We are excited to partner with Scott and his team through the combination of our two platforms. We look forward to working together to further create value and upside for both companies' shareholders."
Investor Presentation
An investor presentation describing the transaction will be made available on the Company's website at http://www.mainstreethealthinvestments.com/investor-events-presentations/.
Transaction Overview
The consideration to be paid to Tiptree on closing of the Transaction will consist of the issuance of approximately 16.8 million Mainstreet common shares at a fixed issuance price of US$9.75 per common share (the "Equity Consideration"), subject to certain adjustments. Following the completion of the Transaction, it is expected that Tiptree will own approximately 34% of Mainstreet's issued and outstanding common shares. In addition to the Equity Consideration, the Company will assume approximately US$261.2 million of in-place property level mortgage financing (the "Debt Financing") with a weighted average interest rate of approximately 4.7% and a weighted average term to maturity of 4.9 years. Approximately US$114 million of the Debt Financing matures within the next three years, providing the Company with an opportunity to consolidate the property level mortgages into a corporate facility and achieve improved administrative and pricing synergies. The Company's pro forma leverage will be approximately 57%.
Upon closing of the Transaction, subject to certain conditions set out in a governance and investor rights agreement (the "Governance and Investor Rights Agreement"), Tiptree will have the right to nominate one board member and one board observer (with no voting rights) to Mainstreet's Board of Directors (the "Board"), which, upon the closing of the Transaction, will be comprised of a total of six board members. Also pursuant to the Governance and Investor Rights Agreement, Tiptree has agreed to a 24 month standstill (the "Standstill") and to restrictions on the sale of its Equity Consideration for a period ranging from 6 months to 18 months. The Standstill prohibits Tiptree from taking certain specified actions without Mainstreet's approval, including among other things, launching a takeover bid or increasing its ownership in Mainstreet.
The Transaction is subject to obtaining certain regulatory approvals, including Toronto Stock Exchange ("TSX") approval, Mainstreet shareholder approval and other customary closing conditions, including consents of certain third parties. In accordance with Section 604(d) of the TSX Company Manual, the Company will initially seek shareholder approval for the issuance of the Equity Consideration by way of written consent of selected shareholders holding more than 50% of the issued and outstanding Mainstreet common shares. In that context, certain shareholders who together, currently own approximately 44% of Mainstreet's common shares, have entered into voting support agreements in favor of the Transaction and have agreed to provide consents. If the Company is unable to obtain the balance of the requisite consents, the Company intends to call a meeting of shareholders to seek the foregoing approval. Assuming the requisite consents are obtained from shareholders, and customary regulatory and closing conditions are satisfied, the Transaction is expected to be completed during the first quarter of 2018.
Overview of Tiptree Inc.
Tiptree is a diversified holding company with a long-term value creation investment philosophy with a focus on scalable, sustainable and growing businesses and investments. Tiptree is aligned with shareholder interests and has a keen focus on growing shareholder value. Tiptree invests in multiple industry sectors with a focus on real estate, insurance, asset management and specialty finance.
CareIT Portfolio Details
The Portfolio is comprised of 35 independent living, assisted living and memory care properties with 2,962 suites and 7 skilled nursing properties with 756 beds. The Portfolio has an attractive quality mix with more than 80% of revenue expected to be derived from private pay funding sources. The Portfolio is located in attractive and growing markets throughout the Eastern and Southern United States and the properties are similar in quality to Mainstreet's existing portfolio. The Portfolio consists of 24 properties leased to operators under long-term triple-net leases and 18 operating properties in joint venture arrangements with operators in which Mainstreet will own the majority of the real estate and the operations.
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Geographic Footprint(1) | ||||||
State | Number of | Skilled | Independent | Assisted | Memory | Total |
| (#) | (#) | (#) | (#) | (#) | (#) |
Georgia | 10 | 726 | -- | 92 | 100 | 918 |
Pennsylvania | 8 | 30 | -- | 525 | 214 | 769 |
Virginia | 6 | -- | 2 | 310 | 87 | 399 |
New York | 4 | -- | 202 | 106 | 25 | 333 |
South Carolina | 4 | -- | 22 | 237 | 24 | 283 |
New Jersey | 2 | -- | 104 | 177 | -- | 281 |
Tennessee | 2 | -- | 68 | 193 | 15 | 276 |
Texas | 1 | -- | 176 | -- | -- | 176 |
Maryland | 3 | -- | -- | 68 | 72 | 140 |
Louisiana | 1 | -- | -- | 64 | 13 Werbung Mehr Nachrichten zur MAINSTREET HEALTH INVESTMENTS INC Aktie kostenlos abonnieren
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