Ventas Buying American Realty Capital Healthcare Trust for $2.6B

Ventas, Inc. announced that it had entered into an agreement to acquire all of the outstanding shares of American Realty Capital Healthcare Trust(ARC Healthcare) in a stock and cash transaction valued at $2.6 billion, or $11.33 per ARC Healthcare share. The deal calls for A.R.C. Healthcare shares to be converted into a fixed number of Ventas shares based upon a negotiated Ventas stock price of $67.13. A.R.C. Healthcare shareholders can elect to receive either 0.1688 of a Ventas common share or $11.33 in cash for each share of A common stock they own, according to a New York Times article. ARC Healthcare's seniors housing operating portfolio, which comprises 27 percent of the NOI, includes 29 communities managed by eight operators, is currently 94% occupied.

"These acquisitions are consistent with our stated strategy to be the leading owner of healthcare and senior living properties globally, and position Ventas to continue to deliver growth and consistent superior returns to our shareholders," Ventas Chairman and Chief Executive Officer Debra Cafaro said. "With the addition of ARC Healthcare and the Canadian seniors housing communities, we are continuing our focus on private pay assets, expanding our industry-leading MOB footprint and international presence, and increasing our diversification while maintaining a strong credit profile and balance sheet. With these two accretive transactions, Ventas continues our excellent track record of value creating acquisitions."

"We are very excited to announce this transaction which delivers our shareholders a compelling premium to the Company's listing, tender offer and five day volume weighted average price ("VWAP") prior to today's announcement. In addition, it provides them the opportunity to participate in the future growth of what will become the largest, and in my view, best managed healthcare REIT and 6th largest overall REIT in the country," said Nicholas Schorsch, Executive Chairman of ARC Healthcare. "Ventas is an ideal strategic partner given its complementary and broadly diversified real estate portfolio, outstanding history of value creation, and extraordinary record of dividend growth. In keeping with our commitment and past practice of aligning management and shareholder interests, the ARC Healthcare management team has elected to take all consideration for this transaction in stock of the combined company."

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REISA Panel on Non-Traded REIT Industry

REISA's Spring Symposium met this month with nearly 600 in attendance, featuring an opening session panel, "Liquidity in Non-Traded REITs: Insights from Industry Leaders," with industry leaders American Realty Capital, Cole Real Estate Investments, Inland Real Estate Corporation, and CNL Financial Group. The main message, as noted by CoStar, was that "non-traded REITs need to continue to implement best practices to reduce fees, improve transparency and bring more investors to the industry. Job one will be unlocking shareholder by making good on the $39 billion in liquidity events being considered by companies in the non-traded REIT space." The panel featured Nicholas Schorsch, chairman and CEO of American Realty Capital, Marc Nemer, president and CEO of Cole, Andrew Hyltin, group president, fund management of CNL, and Daniel Goodwin, chairman and CEO of Inland.

"The non-traded REIT industry has generated a tremendous number of headlines in recent months on a number of fronts, particularly as several offerings have or are pursuing liquidity events," said REISA Executive Director John Harrison. "Non-traded REITs are increasingly popular investment vehicles and account for more than $80 billion in assets under management – as these offerings transition from illiquid to liquid investments, they are shaking up the investment real estate world. These industry giants will share their insights on this increasingly important issue to investors and their financial advisors."

"The public markets believe in non-traded REITs. Tomorrow's public companies are coming from this room," said ARCP's Schorsch. “We sit here together on this panel with close to $30 billion of assets that are going to look for liquidity. The bigger the market, the more efficient the transactions."

The Real Estate and Investment Securities Association is a national trade association serving alternative investment and securities industry professionals since 2003, with over 1,200 members who are key decision makers that represent over 30,000 professionals throughout the nation.

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American Realty Capital Trust Sold to Realty Income for $3B

Realty Income announced an agreement this week to acquire all of the outstanding shares of American Realty Capital Trust in a transaction valued at approximately $3.0 billion. The Board of Directors of both companies have unanimously approved the agreement and the transaction is expected to close during the fourth quarter of 2012 or early in the first quarter of 2013. The acquisition will be financed by Realty Income directly issuing $1.9 billion of its common stock to American Realty Capital Trust shareholders, the assumption of roughly $526 million in debt, and the repayment of approximately $574 million in outstanding debt and expenses.

Approximately 75% of the rental revenue Realty Income will add in this transaction will be generated by investment-grade tenants including: FedEx, Walgreens, CVS, the GSA, Dollar General, Express Scripts, PNC Bank, and Whirlpool, reported CoStar. The addition of these tenants to Realty lncome's existing portfolio increases the company's revenue generated by investment-grade tenants from approximately 19% to 34% of pro forma total revenue.

Tom Lewis, CEO of Realty Income, said, "This acquisition comprehensively advances Realty Income's strategic objectives of increasing its revenue generated by investment grade tenants and further diversifying its portfolio outside of the retail industry." Nicholas Schorsch, Chairman of American Realty Capital Trust, said, "We are very pleased to announce this transaction between ARCT and Realty Income. Realty Income has an extraordinary record of continuous dividend payments and dividend growth together with very strong overall performance."

According to a Washington Post article, the buyout will give Realty Income 501 additional properties, giving it more than 3,250 properties owned under long-term leases to major commercial and retail tenants. Realty Income says that none of New York-based American Realty’s employees will remain with it after the transaction is complete.

For more news and information visit Blumberg Capital Partners.