Most Genesis HealthCare assets to be bought by Ohio company

NEW YORK - Health Care REIT Inc. is buying most of the assets of rehabilitation and nursing care operator Genesis HealthCare Corp., of Kennett Square, for $2.4 billion in the second major health-care real estate deal announced Monday.

The Toledo, Ohio, company said it would buy all of Genesis' real estate assets, which include 147 post-acute-care, rehabilitation, assisted-living, and long-term-care services in 11 states across the Northeast and Mid-Atlantic. It will have an option to buy a 9.9 percent stake in Genesis for $47 million. Genesis will continue to run the properties.

Genesis' properties are in metropolitan markets and are set to continue their strong growth, said Health Care REIT chairman, president, and chief executive officer George Chapman.

"This portfolio would be virtually impossible to replicate," Chapman said. He added that Genesis' properties fit well with Health Care REIT's other assets, as recovering patients can be moved from its hospitals into nearby nursing and rehabilitation centers run by Genesis.

Health Care REIT is buying the assets from JER Partners L.L.C. and Formation Capital L.L.C. The boards of Health Care REIT and Genesis have approved the deal. The company said it expected the sale to close during the second quarter assuming regulators approve.

The company said it planned to sell 25 million shares of stock and $625 million in convertible preferred stock to finance the deal. The underwriters of that offering will have an option to buy as much as 3.8 million common shares and $93.8 million in preferred stock to cover any overallotments. Health Care REIT also obtained a commitment for a bridge loan worth as much as $2.4 billion.

Genesis said its biggest markets include Massachusetts, Maryland, New Jersey, Pennsylvania, and West Virginia. About 95 percent of its capacity is in post-acute and skilled-nursing properties, with assisted-living properties making up the rest. The deal would give Health Care REIT 880 properties with a total value of $13 billion. The company said it would have about 120 clinical specialty units.

Earlier Monday, Ventas Inc. agreed to buy Nationwide Health Properties Inc. in an all-stock deal worth $5.8 billion. The deal would give Ventas more than 1,300 assets. The Chicago company's properties are in 47 states, the District of Columbia, and two Canadian provinces.

Shares of Health Care REIT rose $1.36, or 2.67 percent, to $52.22 Monday.