Bloomberg News

Ventas to Purchase Cogdell Spencer for as Much as $770 Million

December 28, 2011

Dec. 27 (Bloomberg) -- Ventas Inc., the owner of more than 1,300 senior-housing and medical properties, said it will acquire Cogdell Spencer Inc. and its 72 medical office buildings in a deal valued at $760 million to $770 million.

Holders of Cogdell’s common stock will receive $4.25 a share, an 8 percent more than the Dec. 23 closing price, the companies said in a statement today. The transaction is expected to close by June.

Ventas last year agreed to buy Nationwide Health Properties Inc. for about $5.7 billion in the biggest deal ever among health-care real estate investment trusts. With the acquisition of the Cogdell properties, Chicago-based Ventas will own or manage more than 20 million square feet (1.9 million square meters) of medical office buildings, according to the statement.

“Our initial impression of the transaction is positive for Ventas, likely accretive and improves diversification,” Jerry Doctrow, Dan Bernstein, and Seth Cohn, analysts for Stifel Nicolaus & Co. in Baltimore, said in a note to clients today.

Ventas’s purchase of Charlotte, North Carolina-based Cogdell is expected to be financed through the assumption of existing Cogdell mortgage debt and other Ventas borrowings, according to the statement.

“Cogdell’s high-quality properties enhance our medical office building market presence, especially in the southeast,” Ventas Chairman and Chief Executive Officer Debra Cafaro said in the statement.

Cogdell reached a separate agreement to sell its design- build and development business, Erdman, to an affiliate of private-equity firm Lubar & Co., according to the statement. The transaction will include all assets and liabilities of the Erdman business, including about $11 million in projected net working capital on its balance sheet.

--Editors: Christine Maurus, Andrew Blackman

To contact the reporter on this story: Prashant Gopal in New York at pgopal2@bloomberg.net

To contact the editor responsible for this story: Daniel Taub at dtaub@bloomberg.net


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