DigitalBridge Group, Inc. has agreed to sell its Wellness Infrastructure business to an investment group comprised of two real estate investment firms, Highgate Capital Investments and Aurora Health Network, in a deal valued at $3.2 billion.
The Wellness Infrastructure business is composed of a portfolio of more than 300 facilities across senior housing, skilled nursing, medical office buildings and hospitals. Additionally, the Wellness Infrastructure business includes the company’s equity interest in and management of its sponsored non-traded REIT, NorthStar Healthcare Income, Inc.
The global infrastructure REIT said the total consideration includes $316 million of net value to DigitalBridge (comprised of $226 million in cash and a $90 million 5-year seller note) and the assumption of $2.6 billion in consolidated investment-level debt and $294 million of subsidiary-level debt.
“We are thrilled to announce an agreement to sell our Wellness Infrastructure business ahead of schedule and in-line with our carrying values. Having completed our digital transformation in less than two years, this final step will allow us to emerge as the pure-play, fast-growing digital infrastructure REIT we envisioned from day one,” said Marc Ganzi, President and CEO of DigitalBridge. “I want to thank Rich Welch and his team, who have done an incredible job managing our Wellness business through the pandemic, strategically positioning our team to generate positive equity value for our shareholders and remain focused on growing our digital infrastructure platform.”
“We are excited to announce another significant transaction with DigitalBridge,” said Mahmood Khimji, Co-Founder and Managing Principal of Highgate. “In partnership with Aurora, we look forward to continuing to operate and effectively steward these high-quality healthcare facilities, serving patients and communities across the United States and the United Kingdom.”
“We are pleased to enter into this transaction,” said Joel Landau, Co-Founder and Managing Director of Aurora. “We look forward to a productive and value-enhancing partnership with Highgate in accordance with our core principles, which combine a focus on clinical excellence and quality of care alongside our deep knowledge of the market.”
In connection with the Wellness sale, Highgate and Aurora will assume $2.6 billion in consolidated investment-level debt collateralized by the Wellness Infrastructure portfolio as well as $294 million in subsidiary-level debt, including the company’s trust preferred securities (TruPS) and 5.375% exchangeable senior notes, which are obligations of NRF Holdco, the holding company for the Wellness Infrastructure business.
The Wellness sale net value of $316 million is in line with the net equity carrying value of the underlying assets as of June 30, 2021 when accounting for the transfer of the $294 million in subsidiary-level debt included in the Wellness sale.
The Company currently expects the Wellness Sale to be completed in early 2022, subject to closing conditions and third-party approvals.