Ventas Completes Acquisition of Ardent
Health Services and Separates Hospital Operations from Owned Real
Estate
Operating Company of Ardent Health Services
to be Majority Owned by EGI-Controlled Entity
Ventas, Inc. (“Ventas”), Equity Group Investments (“EGI”), and
Ardent Health Services (“AHS”) today announced the completion
of their previously reported transactions. Ventas has completed its
acquisition of AHS, and an EGI affiliate has completed its majority
investment in a newly capitalized hospital operating company, which
will continue to be branded “Ardent.” The transactions were
announced on April 6, 2015 and July 7, 2015, respectively.
At closing, Ventas separated AHS’ owned real
estate from its hospital operations, folding the real estate
into the Ventas portfolio, and spinning off AHS’ hospital
operations into a separate entity, Ardent. Concurrently, an
EGI-controlled entity acquired a majority stake in the operations
company, while Ventas retained a 9.9 percent
interest and AHS management retained a significant ownership
stake.
Ardent’s exceptional and experienced management team, under
President and Chief Executive Officer
David Vandewater, will continue to lead the operating
company. He and his team were responsible for establishing AHS
as a premier provider of healthcare services and as one of the top
10 investor-owned hospital companies in the U.S. Ardent will
continue to provide high-quality healthcare services in three
key service areas: Amarillo, Texas; Tulsa, Oklahoma; and
Albuquerque, New Mexico. The portfolio includes 14 hospitals and
three multi-specialty physician groups. Ardent,
which currently generates approximately $2 billion in annual
net revenues, will remain headquartered in Nashville with no
expected changes to its current operations.
“We are pleased to have completed our acquisition of Ardent
Health Services, a top 10 U.S. hospital operator with a strong
financial and operating profile,” said Ventas Chairman and Chief
Executive Officer Debra A. Cafaro. “We are also delighted that EGI
will be the majority owner of the operating company. With Ardent’s
experienced, well-respected management team and scalable platform,
and EGI as our partner, we are confident we can build a formidable
business in the U.S. hospital industry.”
Sam Zell, Chairman of EGI, said, “America’s large, highly
fragmented health care sector is experiencing an unprecedented
consolidation phase. The unique combination of Ventas, Ardent and
EGI creates an exceptional platform to deliver best-in-class health
care services to Ardent’s patients.”
David T. Vandewater, President and Chief Executive Officer of
Ardent, said, “We look forward to continuing to serve our existing
patients, physicians, employees and communities, and we are excited
about the prospects of entering new markets with our new capital
partners.”
Ventas’s acquisition of AHS is expected to be immediately
accretive to Ventas’s normalized funds from operations per share on
a leverage neutral basis.
About Ventas
Ventas, Inc., an S&P 500 company, is a leading real estate
investment trust. Its diverse portfolio of more than 1,600 assets
in the United States, Canada and the United Kingdom consists of
seniors housing communities, medical office buildings, skilled
nursing facilities, hospitals and other properties. Through its
Lillibridge subsidiary, Ventas provides management, leasing,
marketing, facility development and advisory services to highly
rated hospitals and health systems throughout the United States.
More information about Ventas and Lillibridge can be found at
www.ventasreit.com and www.lillibridge.com.
About Equity Group Investments
Equity Group Investments, the private firm founded by Sam Zell
over 45 years ago, specializes in opportunistic investments across
the debt and equity markets. EGI has extensive experience in
energy, industrial, manufacturing, logistics and transportation,
business services, communications, health care and real estate.
About Ardent Health Services
Ardent Health Services invests in quality health care. In
people, technology, facilities and communities, Ardent makes
considerable investments, producing high-quality care and
extraordinary results. Based in Nashville, Tenn., Ardent’s
subsidiaries own and operate acute care health systems in three
service areas – Amarillo, Texas; Tulsa, Okla. and Albuquerque, N.M.
– that include 14 hospitals and three multi-specialty physician
groups. For more information, go to www.ardenthealth.com.
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements include, but are not limited to,
statements regarding the benefits of the proposed transaction with
AHS, including future financial and operating results, statements
regarding plans, objectives, expectations relating to the proposed
transaction and other statements that are not historical facts. All
statements regarding Ventas, Inc. (the “Company”) or its tenants’,
operators’, borrowers’ or managers’ expected future financial
condition, results of operations, cash flows, funds from
operations, dividends and dividend plans, financing opportunities
and plans, capital markets transactions, business strategy,
budgets, projected costs, operating metrics, capital expenditures,
competitive positions, acquisitions, investment opportunities,
dispositions, acquisition integration, growth opportunities,
expected lease income, continued qualification as a real estate
investment trust (“REIT”), plans and objectives of management for
future operations and statements that include words such as
“anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,”
“intend,” “may,” “could,” “should,” “will” and other similar
expressions are forward-looking statements. These forward-looking
statements are inherently uncertain, and actual results may differ
from the Company’s expectations. The Company does not undertake a
duty to update these forward-looking statements, which speak only
as of the date on which they are made.
The Company’s actual future results and trends may differ
materially from expectations depending on a variety of factors
discussed in the Company’s filings with the Securities and Exchange
Commission. These factors include without limitation: (a) the risk
that the expected benefits of the AHS transaction, including
financial results, may not be fully realized or may take longer to
realize than expected; (b) risks related to disruption of
management’s attention from ongoing business operations due to the
AHS transaction; (c) the effect of the announcement of the AHS
transaction on the Company’s or Ardent’s relationships with their
respective customers, tenants, lenders, operating results and
businesses generally; (d) the ability and willingness of the
Company’s tenants, operators, borrowers, managers and other third
parties to satisfy their obligations under their respective
contractual arrangements with the Company, including, in some
cases, their obligations to indemnify, defend and hold harmless the
Company from and against various claims, litigation and
liabilities; (e) the ability of the Company’s tenants, operators,
borrowers and managers to maintain the financial strength and
liquidity necessary to satisfy their respective obligations and
liabilities to third parties, including without limitation
obligations under their existing credit facilities and other
indebtedness; (f) the Company’s success in implementing its
business strategy and the Company’s ability to identify,
underwrite, finance, consummate and integrate diversifying
acquisitions and investments, including investments in different
asset types and outside the United States; (g) macroeconomic
conditions such as a disruption of or lack of access to the capital
markets, changes in the debt rating on U.S. government securities,
default or delay in payment by the United States of its
obligations, and changes in the federal or state budgets resulting
in the reduction or nonpayment of Medicare or Medicaid
reimbursement rates; (h) the nature and extent of future
competition, including new construction in the markets in which the
Company’s seniors housing communities and medical office buildings
(“MOBs”) are located; (i) the extent of future or pending
healthcare reform and regulation, including cost containment
measures and changes in reimbursement policies, procedures and
rates; (j) increases in the Company’s borrowing costs as a result
of changes in interest rates and other factors; (k) the ability of
the Company’s operators and managers, as applicable, to comply with
laws, rules and regulations in the operation of the Company’s
properties, to deliver high-quality services, to attract and retain
qualified personnel and to attract residents and patients; (l)
changes in general economic conditions or economic conditions in
the markets in which the Company may, from time to time, compete,
and the effect of those changes on the Company’s revenues, earnings
and capital sources; (m) the Company’s ability to pay down,
refinance, restructure or extend its indebtedness as it becomes
due; (n) the Company’s ability and willingness to maintain its
qualification as a REIT in light of economic, market, legal, tax
and other considerations; (o) final determination of the Company’s
taxable net income for the year ended December 31, 2014 and for the
year ending December 31, 2015; (p) the ability and willingness of
the Company’s tenants to renew their leases with the Company upon
expiration of the leases, the Company’s ability to reposition its
properties on the same or better terms in the event of nonrenewal
or in the event the Company exercises its right to replace an
existing tenant, and obligations, including indemnification
obligations, the Company may incur in connection with the
replacement of an existing tenant; (q) risks associated with the
Company’s senior living operating portfolio, such as factors that
can cause volatility in the Company’s operating income and earnings
generated by those properties, including without limitation
national and regional economic conditions, costs of food,
materials, energy, labor and services, employee benefit costs,
insurance costs and professional and general liability claims, and
the timely delivery of accurate property-level financial results
for those properties; (r) changes in exchange rates for any foreign
currency in which the Company may, from time to time, conduct
business; (s) year-over-year changes in the Consumer Price Index or
the UK Retail Price Index and the effect of those changes on the
rent escalators contained in the Company’s leases and the Company’s
earnings; (t) the Company’s ability and the ability of its tenants,
operators, borrowers and managers to obtain and maintain adequate
property, liability and other insurance from reputable, financially
stable providers; (u) the impact of increased operating costs and
uninsured professional liability claims on the Company’s liquidity,
financial condition and results of operations or that of the
Company’s tenants, operators, borrowers and managers, and the
ability of the Company and the Company’s tenants, operators,
borrowers and managers to accurately estimate the magnitude of
those claims; (v) risks associated with the Company’s MOB portfolio
and operations, including the Company’s ability to successfully
design, develop and manage MOBs, to accurately estimate its costs
in fixed fee-for-service projects and to retain key personnel; (w)
the ability of the hospitals on or near whose campuses the
Company’s MOBs are located and their affiliated health systems to
remain competitive and financially viable and to attract physicians
and physician groups; (x) the Company’s ability to build, maintain
and expand its relationships with existing and prospective hospital
and health system clients; (y) risks associated with the Company’s
investments in joint ventures and unconsolidated entities,
including its lack of sole decision-making authority and its
reliance on its joint venture partners’ financial condition; (z)
the impact of market or issuer events on the liquidity or value of
the Company’s investments in marketable securities; (aa) merger and
acquisition activity in the seniors housing and healthcare
industries resulting in a change of control of, or a competitor’s
investment in, one or more of the Company’s tenants, operators,
borrowers or managers or significant changes in the senior
management of the Company’s tenants, operators, borrowers or
managers; (ab) the impact of litigation or any financial,
accounting, legal or regulatory issues that may affect the Company
or its tenants, operators, borrowers or managers; (ac) changes in
accounting principles, or their application or interpretation, and
the Company’s ability to make estimates and the assumptions
underlying the estimates, which could have an effect on the
Company’s earnings; (ad) uncertainties as to the completion and
timing of the Company’s proposed spin-off transaction; and (ae) the
impact of the Company’s proposed spin-off transaction on the
Company’s business. Many of these factors are beyond the control of
the Company and its management.
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Ventas, Inc.Lori B. Wittman(877) 4-VENTAS
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