By Angela Chen
Ventas Inc. has agreed to a deal along with Equity Group
Investments to take a majority ownership of Ardent Health Services,
the hospital operator Ventas had agreed to buy earlier this
year.
In April, Ventas said it planned to buy Ardent for $1.75 billion
in cash and said it would spin off most of its skilled-nursing
facilities into an independent real-estate investment trust.
Now the hospital operations of Ardent will be majority owned by
EGI, with Ventas taking a 9.9% interest. Current Ardent management
will hold a significant ownership stake in the company.
Nashville-based Ardent is one of the largest for-profit hospital
operators in the U.S. and generates about $2 billion in annual
revenue.
The companies said Tuesday's deal values Ardent at about $475
million.
After closing, Ventas and Ardent will enter triple-net leases
with an initial annual base rent of $105 million. Ventas expects
the cash rental yield on its real-estate investment to be about
7.5%.
"With Ardent, we are well positioned to grow in the large,
fragmented and rapidly consolidating $1 trillion domestic hospital
segment," said Ventas Chief Executive Debra Cafaro.
The deal is expected to close in the third quarter. Ardent will
continue to be led by its current management in Nashville.
Shares of Ventas, inactive premarket, have fallen about 12% this
year through Monday's close.
Write to Angela Chen at angela.chen@dowjones.com
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