Sabra Announces Public Offering; Completes Deal With Holiday Affiliates

(RTTNews) - Sabra Health Care REIT Inc. (SBRA, SBRAP) announced it plans to offer 6 million shares of common stock in an underwritten public offering. Sabra intends to use the net proceeds to repay borrowings outstanding under the second amended and restated revolving credit facility of Sabra Health Care Limited Partnership, of which Sabra is the sole general partner.

The company also announced that on September 25, 2014 it completed the acquisition of 21 independent living facilities, located in 15 states, from affiliates of Holiday Acquisition Holdings Corp. for a total cash purchase price of $550.0 million.

Concurrently with the acquisition, the company entered into a triple-net master lease agreement with certain wholly-owned subsidiaries of Holiday AL Holdings LP, an affiliate of Holiday. An affiliate of Holiday will continue to operate the facilities pursuant to a management agreement with Holiday Tenant. The master lease has an initial term of 15 years with two five-year renewal options and provides for base rent in the first year of approximately $30.3 million, with annual rent increases of 4.0% in years two and three and the greater of 3.5% or CPI during the remainder of the lease term. The company expects the master lease to generate annual lease revenues determined in accordance with GAAP, of $39.3 million and an initial yield on cash rent of 5.50%.