Omega Healthcare to Acquire MedEquities

The deal represents a $600 million enterprise value for MedEquities and would diversify Omega’s properties and operators. Morrison & Foerster LLP advised MedEquities in the agreement.

Omega Healthcare Investors Inc. has entered into a definitive merger agreement to acquire all the outstanding shares of MedEquities Realty Trust Inc. The deal will represent a $600 million enterprise value for MedEquities and would diversify Omega’s properties and operators. The merger will bring nine new operators, increase non-skilled nursing assets by $296 million, and will also include the acquisition of the fee simple interest in 34 properties across seven states, as well as the takeover of $34 million in mortgage loans. 

With this transaction, MedEquities stockholders will receive a fixed exchange ratio of 0.24 Omega common shares plus $2 in cash for each share of common stock held. This represents a $10.26 value per share based on the $35.15 closing price for Omega common stock on December 31, 2018. In addition, MedEquities has declared a cash dividend of $0.21 per share payable to the holders of record of common stock as of the end of trading on the New York Stock Exchange on the trading day immediately prior to the closing date of this deal. Although this is a merger, there are no changes set in place for Omega’s board of directors or executive officers. 

“This is a very compelling transaction for MedEquities’ stockholders. We believe going forward that our stockholders will be in an excellent position from having an investment in Omega’s diversified portfolio,” said John McRoberts, chairman & CEO of MedEquities, in a prepared statement. “Taylor [Pickett] and his team have a long and successful history of asset growth and diversification as well as solid asset management. Additionally, our operators will benefit from Omega’s depth of knowledge of the healthcare industry, their strong capital position and their commitment to support and grow with their tenants.”

Back in September 2017, Omega Healthcare enhanced its portfolio by acquiring 2,074 beds in Indiana, with the $190 million purchase of 15 skilled nursing facilities from two unidentified sellers.

Advisement team 

Morrison & Foerster LLP advised MedEquities in the agreement. The team included Corporate Partner & Co-Chair of the firm’s REIT practice David Slotkin, as well as Corporate Partners Lauren Bellerjeau and Andy Campbell.

Additional team members included Corporate Associates Marianne Marchiori and Meredith Carr. Tax guidance was led by Partner Shane Shelley and Associate Jessica Stern. Compensation and Benefits support was led by Partner Dom Bozzetti and of Counsel Amanda Hines Gold.