Primary Health Properties, a healthcare facility investor, announced that it would be acquiring its rival Prime Public Partnerships. The acquisition, Primary Health noted, would be the biggest acquisition of the firm as it will be purchasing PPP for GBP41 million.
PHP acts as a real estate investment trust (REIT). the trust's specialty is in ownership of long leasehold or freehold interests of modern purpose-built healthcare facilities. PHP has 186 of these facilities it owns all over UK.
Terms of the acquisition deal would have PHp buying the 54 healthcare facility portfolio of PPP. PPP's portfolio has a combined valuation of GBP233 million. According to UK newspaper The Telegraph, the consolidation of the REIT-like firm and PPP would put the valuation of its 257-property combined portfolio to GBP942.3 million. The announcement of the acquisition had made PHP's shares climb 2.93 pence per share to 353.5 pence. The acquisition deal is awaiting shareholder approval on the side of PHP, which would be known in a December 2 meeting.
PHP disclosed that the acquisition will enhance its earnings in its first full year following the takeover. The buyout would also be able to enhance its earnings further by taking opportunities in debt refinancing and asset management.
PHP managing director Harry Hyman said his group has plans to acquire GBP100 million worth of property in the succeeding thtee years. Hyman revealed that PHP already had discussion with some potential targets and that PHP is engaged in a string of upcoming deals. However, Hyman said those deals were not as big as the PPP acquisition.
The acquisition agreement will also have PHP absorbing GBP178.4 million worth of PPP's debt, of which the former would be refinancing such debt in the succeeding months, PHP said in its statement. PHP currently has GBP400 million of existing debts, but almost all had been refinanced recently or have an average maturity of year 2019, Hyman said.
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