MPT Enters Joint Venture with Primonial Group for 71 German Hospitals, Expects to Recognize Gain of €500 Million and Cash Proceeds of €1.14 Billion
Birmingham, AL — June 7, 2018: Medical Properties Trust, Inc. (NYSE: MPW), a global leader in hospital real estate finance, announced that it is forming a joint venture with Primonial Group under which Primonial will acquire a 50 percent interest in a portfolio of 71 post-acute hospitals throughout Germany assembled by Medical Properties Trust (MPT) over the last few years. MPT will retain a 50 percent interest in the portfolio (valued by this transaction at approximately €1.635 billion) and an MPT affiliate will continue to manage the facilities.
“This transaction will validate MPT’s pioneering entry into European hospital real estate since our first acquisition in Germany in 2013,” said Edward K. Aldag, Jr., MPT’s Chairman, President and CEO. “Through forward-looking and creative investment structures, MPT assembled this portfolio in competition with other large U.S. REITs, sovereign wealth, private equity and other investors.
“Investor interest in this JV opportunity was strong and came from funds based in Asia, Europe, Canada and the U.S. The attraction was not only to the healthcare sector in Germany, but equally to the opportunity to partner with MPT, the world’s leading specialist in hospital real estate. Primonial Group, one of Europe’s real estate leaders, has now committed to a long-term investment in hospital real estate that demonstrates the importance of hospitals as an asset sector in general, and MPT’s portfolio in particular,” Aldag noted.
“The benefits to MPT of the arrangement also include access to less expensive forms of equity and debt capital and an independent indication of MPT’s asset values,” he concluded.
Based on an agreed 6.0 percent valuation of the portfolio’s 2017 rental income, MPT expects to report a gain of approximately €500 million upon closing. Total expected proceeds to MPT, including its portion of secured debt, will be approximately €1.14 billion. The company expects to use such proceeds to fully repay balances under its revolving credit facility, to make investments in additional U.S. and European hospital assets and for other corporate purposes.
Closing of the transaction will be governed by customary conditions, including approval of the German Federal Cartel Office and completion of definitive documentation concerning secured financing, and is expected to be completed during the third quarter of 2018.