Medical Properties Trust, Inc. Completes $1.25 Billion Investment in Nine Steward Health Care Hospitals
Birmingham, AL – October 3, 2016: Medical Properties Trust, Inc. has completed the acquisition of real estate interests of nine acute care hospitals operated by Boston-based Steward Health Care System, LLC, the largest for-profit healthcare provider in Massachusetts, setting the stage for Steward’s national growth.
The closing included MPT’s investment of $1.2 billion in sale-leaseback and mortgage transactions for the real estate assets, plus its commitment of $50 million for an equity stake in Steward.
As part of the deal, which is immediately accretive to earnings, MPT also gains a right of first refusal to acquire up to $1 billion of Steward’s future hospital acquisitions.
“We are delighted to establish a relationship with one of the most forward-thinking healthcare providers in the country,” said Edward K. Aldag, Jr., Chairman, President and CEO of Medical Properties Trust.
“Since its inception, Steward Health Care has achieved outstanding results by developing the largest fully integrated community-based healthcare delivery system in New England,” Aldag noted. “This new relationship with Steward represents a tremendous opportunity for MPT, as Steward positions itself for rapid growth.”
Founded in November 2010 with a private equity investment from Cerberus Capital Management, Steward has built an innovative, integrated portfolio of inpatient and outpatient services in more than 150 communities across Eastern Massachusetts, Rhode Island and Southern New Hampshire.
Steward’s nationally recognized Accountable Care Organization (ACO) model has yielded dramatic improvements in the quality of patient care and significant achievements in cost containment.
Over the past six years, Steward has invested more than $800 million in infrastructure, technology, facilities and services to benefit its patients and their communities. The investment from Medical Properties Trust provides more than $100 million in additional funding designated for capital improvements at existing Steward facilities.
“Like MPT, Steward believes in reinvesting in its facilities,” Aldag observed. “This mindset will prove beneficial to the people they serve, and we look forward to expanding our relationship with Steward in the years ahead.”
Ralph de la Torre, M.D., Founder, Chairman and CEO of Steward Health Care System, said, “We believe MPT’s total investment is a strong validation of our business model and an endorsement of our ability to scale nationally. This ensures Steward will continue to provide high quality healthcare at an affordable cost in New England, and enables us to grow our proven quality model.”