American Realty Capital Healthcare Trust being acquired by Ventas

Newly listed American Realty Capital Healthcare Trust being snapped up by giant health care REIT Ventas in a stock and cash deal valued at $2.6 billion.
JUN 05, 2014
Nicholas Schorsch's newly listed American Realty Capital Healthcare Trust Inc. is being acquired by giant health care REIT Ventas Inc. in a stock and cash transaction valued at $2.6 billion, or $11.33 per share. With the ticker symbol HCT, the ARC Healthcare Trust Inc. launched as a nontraded real estate investment trust in 2011 and listed in April. The offer by Ventas (VTR), represents $1.38 more than ARC Healthcare Trust's closing price Friday, or about a 14% premium to investors. Mr. Schorsch is executive chairman of the ARC Healthcare Trust. So far, the REIT's sponsor, American Realty Capital, has listed or merged about a half-dozen nontraded REITs since 2012, by far the most in an industry that faced criticism during and after the credit crisis for locking up investor cash in illiquid deals. The transaction is scheduled to close at the end of the fourth quarter. Ventas is a giant REIT, with nearly $20 billion in market capitalization. Upon the closing of the transaction, ARC Healthcare Trust shareholders are expected to own about 8 percent of Ventas' shares of common stock then outstanding. In the transaction, ARC Healthcare Trust shares will generally be converted into a fixed number of Ventas shares, based upon a negotiated Ventas stock price of $67.13. In the transaction, ARC Healthcare shareholders will have the option to elect to receive either 0.1688 Ventas common shares or $11.33 in cash for each share of ARC Healthcare Trust's common stock they own. Ventas on Monday announced another, separate $900 million all-cash deal to purchase 29 senior citizen housing communities in Canada. On Friday, Ventas shares closed trading at $66.80. Debra Cafaro, chief executive of Ventas, said in an interview Monday there were plenty of future opportunities in health care real estate, driven particularly by a generally aging population and the expansion of health care due to the Affordable Care Act. “The health care market is a trillion-dollar market, is still highly fragmented and growing,” Ms. Cafaro said. “Public health care REITs only have about 12% to 15% of that trillion-dollar pie. Compare that to malls, with REITs owning 60% or more of malls.” Mr. Schorsch pointed to the strength of Ventas' balance sheet, with an investment grade rating from credit agencies and its level of leverage, as being particularly attractive to ARC Healthcare Trust shareholders. “Our assets on her balance sheet make a win win,” he said. ARC has raised about $1 billion so far for its second health care REIT, American Realty Capital Healthcare Trust II Inc., Mr. Schorsch said. Its goal is to eventually raise $1.8 billion to $2 billion from retail investors.

Latest News

Osaic executives Kristy Britt and Greg Cornick to leave
Osaic executives Kristy Britt and Greg Cornick to leave

The firm's CFO and EVP of Wealth Management Solutions are the latest executives to exit the broker-dealer.

Estate planning becomes a client retention issue for financial advisors, survey finds
Estate planning becomes a client retention issue for financial advisors, survey finds

Clients are saying they would consider switching advisors if another professional offered estate planning services, according to a new Trust & Will survey.

Candidly adds AI agents for Trump Accounts, workplace benefits
Candidly adds AI agents for Trump Accounts, workplace benefits

CEO Laurel Taylor says the fintech's composable AI stack helps workers optimize dollars across Trump Accounts, 529s, 401(k)s, and other employee benefits.

BMO adds three advisors in Dallas amid Y'all Street wealth boom
BMO adds three advisors in Dallas amid Y'all Street wealth boom

The bank has swiped three private banking veterans from BNY as the city climbs the ranks of America's fastest-growing wealth hubs.

UBS moves toward full-service US bank as plans to extend wealth business
UBS moves toward full-service US bank as plans to extend wealth business

Employee accounts, crypto trials and job cuts frame a pivotal year for the Swiss lender.

SPONSORED Who builds the income when the pension disappears?

Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income

SPONSORED Why direct indexing stopped being optional

Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.