Medical Properties Trust (MPT) has agreed to acquire five general acute care hospitals from Tenet Healthcare for approximately $900 million.
The hospitals will be leased pursuant to MPT’s master lease agreement with Steward Health Care System, which is expected to exercise its options to extend the lease term to expire in 2041, leaving a five-year extension option remaining.
The company expects to initially fund the total cash consideration using cash on hand, as well as funds from the closing of binding property sales, proceeds from loan repayments, and funds from other anticipated capital recycling transactions with an aggregate value projected to exceed $1 billion.
”Collectively, the pricing of these transactions is expected to provide an attractive cost of equity capital to fund the Florida sale-leaseback transaction and other announced investments, including MPT’s recently announced agreement to acquire 18 inpatient behavioral health hospitals,” said the company in a statement. The sources of financing actually used will depend upon a variety of factors, including market conditions.
The Florida sale-leaseback transactions are expected to close during the second half of 2021.
“We are excited to own these essential community hospitals in areas with positive demographic trends at a very attractive yield,” said Edward K. Aldag, Jr., Medical Properties Trust’s Chairman, President, and CEO. “Furthermore, we have a great deal of confidence in Dr. Ralph de la Torre and the Steward team and believe that their physician-led operating model will further enhance the level of care each facility has long been providing to its local population.”