Medical Properties Trust Agrees To Merge Capella Health With RegionalCare

(RTTNews) - Medical Properties Trust Inc. (MPW) or MPT announced that the Company and its affiliates have entered into definitive agreements with RegionalCare Hospital Partners Inc. , an affiliate of certain funds managed by affiliates of Apollo Global Management, LLC (APO) , under which MPT's investment in the operations of Capella Healthcare, Inc. will be merged with RegionalCare. Completion of the merger is subject to customary closing conditions.

As per the terms of the definitive agreements, MPT will receive approximately $390 million for its equity investment and loans made as part of MPT's August 2015 transactions with Capella. In addition, MPT will also receive $210 million in prepayment of two mortgage loans for hospitals in Russellville, Arkansas, and Lawton, Oklahoma, that were also part of the August 2015 transactions.

The Company will retain an approximate $100 million loan for a hospital property in Olympia, Washington, that is expected to be converted to a sale and leaseback arrangement upon regulatory approval. Additionally, the Company and an Apollo affiliate will each invest up to $50 million in unsecured notes to be issued by RegionalCare.

Net proceeds from the transaction of approximately $550 million are expected to be used to reduce MPT's debt, after which the Company's net debt is expected to be approximately 5.6 times pro forma annualized EBITDA and 49% of total gross assets.

MPT affirmed its full year 2016 guidance of Normalized FFO in the range of $1.29 to $1.33 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $1.31 per share for fiscal year 2016. Analysts' estimates typically exclude special items.