Medical Properties Trust (MPT) announced this week that it had acquired Ernest Health and its portfolio of 16 properties for $400 million according to a Health Investor article. MPT will assume the real estate assets of 12 Ernest facilities and lease the properties back to Ernest under an initial term of 20 years with three five-year extension options. A venture between an MPT affiliate and existing management of Ernest will acquire Ernest Health, Inc. RBC Capital Markets, LLC acted as MPT's exclusive financial advisor for this transaction. According to the article, MPT intends to fund the acquisition with a combination of borrowings under its revolving credit facility, borrowings under a new $80 million term loan facility from JP Morgan Chase Bank, NA and RBC Capital Markets, as well as net proceeds from other debt or equity capital market issuances.
"With transformative, highly accretive transactions like these, we continue to demonstrate our unique ability to create high quality long term sources of cash flow from hospital real estate," said Edward K Aldag, chief executive of MPT. "Completing these transactions will give MPT upside potential to the long term growth of Ernest, and adds another premiere post acute hospital operator to our relationships with others such as Vibra, Kindred, Healthsouth, LifeCare, Cornerstone and Post Acute."
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