Griffin-American Healthcare REIT III and Griffin-American Healthcare REIT IV Announce Definitive Agreements to Merge and Acquire American Healthcare Investors
In addition,
"We are excited about the opportunities this transformative tri-party transaction creates for both
The combined company will own an approximately 19 million-square-foot international portfolio of healthcare real estate comprised of 314 medical office buildings, senior housing communities, skilled nursing facilities and other real estate-related investments with a gross investment value1 of
The REIT merger was negotiated on behalf of
The proposed transactions are expected to close in the fourth quarter of 2021, subject to certain closing conditions, including the approval of the REIT merger by both
Anticipated Strategic Benefits
Larger, More Broadly Diversified Portfolio
- Greater Size and Scale. Management of the companies ("the management team") believes that American Healthcare REIT will have the scale to attract institutional investors in the public market to fuel continued growth with a lower cost of capital
- Broader Geographic Diversification. A combination of the companies creates a well-diversified national and international portfolio while maintaining strategic concentrations in strong Midwest, Southeast, and
Northeast U.S. markets with positive fundamentals and growth opportunities - Broader Tenant and Operator Diversification. American Healthcare REIT will have a more diversified roster of credit healthcare systems and established operators, which the management team believes will help position American Healthcare REIT favorably with institutional investors
IPO/Listing Preparation
- The management team believes the REIT merger and AHI acquisition will position the combined company favorably for a future listing on a national stock exchange
- The independent directors and executive management are planning for a listing by the end of 2022, subject to the closing of the proposed transactions and market conditions
- The acquisition of the AHI platform will result in a fully integrated, self-managed REIT, which the management team believes should support much stronger earnings multiples/valuations in a public listing compared to externally managed REITs
Accretion Benefit from Merger and AHI Acquisition Expense Reductions
- The management team believes the REIT merger will drive general and administrative efficiencies and cost savings that will accrue to stockholders immediately and is anticipated to result in enhanced long-term value
- The AHI acquisition is expected to drive approximately
$21 million annually in cash accretion to stockholders, further enhancing long-term value - The cash flow benefits that result from the transactions are expected to provide near-term investor distribution policy flexibility; the post-merger distribution rate is expected to be
$0.40 per share annually, subject to approval by the board of directors of the combined company
Depth of Team and Enhanced Alignment of Interests
- AHI is currently one of the largest privately held healthcare real estate investment firms globally based upon assets under management and possesses a strong track record for driving stockholder value
- Over the past 15 years, the management team raised
$6.7 billion in equity and acquired$9.1 billion in healthcare real estate acrossthe United States , theUnited Kingdom and theIsle of Man - 100% of the purchase price of AHI will be paid in the form of operating partnership units that may later be converted into American Healthcare REIT stock, subject to market lock-up provisions, further enhancing already significant, long-term alignments of interests between the management team and REIT stockholders
The Management Team Believes that Healthcare Real Estate Remains a Highly Attractive Asset Class
- The management team believes that powerful demographic trends will provide tailwinds for healthcare real estate for years to come as the asset class continues its recovery from the COVID-19 pandemic
Transaction Terms
In exchange for each share of
Advisors
(1) Gross investment value is comprised of acquisition costs and subsequent capital expenditures that pertain to the company's pro-rata ownership.
(2) Based on gross investment value as of
About Griffin-American Healthcare REIT III, Inc.
Griffin-American Healthcare REIT III, Inc. invests in a diversified portfolio of healthcare real estate assets, focusing primarily on medical office buildings, senior housing communities, skilled nursing facilities, hospitals and other healthcare-related investments.
About
About
ADDITIONAL INFORMATION ABOUT THE MERGER
In connection with the proposed REIT merger,
PARTICIPANTS IN SOLICITATION RELATING TO THE MERGER
NO OFFER OR SOLICITATION
This communication and the information contained herein does not constitute an offer to sell or the solicitation of an offer to buy or sell any securities or a solicitation of a proxy or of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. This communication may be deemed to be solicitation material in respect of the proposed REIT merger.
Forward-Looking Statements
This release contains statements that constitute "forward-looking statements," as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are intended to be covered by the safe harbor provided by the same. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; no assurance can be given that these expectations will be attained. Factors that could cause actual results to differ materially from these expectations include, but are not limited to, the risk that the REIT merger will not be consummated within the expected time period or at all; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger or acquisition agreements; the inability of
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