Ventas to Buy Healthcare Services Provider Ardent

Healthcare real-estate investment trust (REIT) Ventas (Chicago, IL, USA) will buy hospital operator Ardent Medical Services (Nashville, TN, USA) for USD 1.75 billion in cash.

Under the terms of the agreement, Ventas will own 10 hospital properties and will separate their operations into entities that will be owned by current Ardent management, along with other equity sources that will hold long-term leases from Ventas. Ardent operates in Amarillo (TX, USA), Tulsa (OK, USA), and Albuquerque (NM, USA). The facilities include acute-care, heart, rehabilitation, and women’s-health hospitals totaling 2,045 hospital beds.

In addition, Ventas has unveiled plans to spin off its post-acute skilled nursing facility (SNF) portfolio into an independent and publicly traded REIT to be named SpinCo. SpinCo will own 355 triple-net leased SNFs and other healthcare assets operated by 44 private regional and local care providers, spanning 37 US states. The spinoff will be one of two companies specializing in such rehabilitation and nursing centers in the US, the other being Omega Healthcare Investors (Hunt Valley, MD, USA).

“This transaction builds upon our excellent track record of executing innovative and value-creating opportunities, and solidifies our leadership position in healthcare real estate,” said Debra Cafarom, chairman of Ventas. “The addition of Ardent's platform, which includes high-quality assets with significant market share in three key markets, and a highly-regarded hospital management team, creates a strong avenue for growth in the attractive hospital real estate market.”

Texas, Oklahoma, and New Mexico are all states where enrollments in federal health insurance programs initiated by Obamacare have been high. As a result, US hospitals are getting a stronger-than-expected benefit from an influx of low-income patients whose bills are paid by Medicaid program; a 3.25% increase in Medicare reimbursement rates is slated for fiscal year 2016. The USD 1 trillion hospital market is also benefiting from increasing emergency room visits and an aging population.

Related Links:
Ventas 
Ardent Medical Services
Omega Healthcare Investors