Health Care REIT has agreed to pay Revera Inc, the Canadian senior housing operator, the amount of US$697 million in cash in exchange for a majority ownership in the 47 senior housing communities it operates. The move is a clear sign that the REIT is diversifying its interest in Canada.
Aside from the payout, Health Care REIT would be assuming nearly US$419 million of existing mortgage indebtedness. The ownership would be at 75% in the portfolio. About two thirds of the portfolio is located in the five largest metropolitan areas in Canada such as Toronto, Vancouver and Calgary. It is valued at US$1.35 billion overall.
Revera for its part is the second largest senior housing and long term care operators in Canada. The firm would continue to manage the communities through a management contract that is incentive laden.
Aside from the acquisition, Health Care REIT is also preparing nearly 18 million common shares to be sold through an IPO to pay off debts and for other general purposes, such as operations as well as capital expenditures.
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