March 4, 2011 6:00 AM
Dealmaker of the Week: Robin Panovka Wachtell, Lipton, Rosen & Katz
Posted by Tom Huddleston Jr.
Ventas, a Chicago-based real estate investment trust.
The merger of the two companies will create the country's largest health care REIT. Under the agreement, Ventas would pay $5.8 billion in stock (with each NHP shareholder receiving a fixed exchange ratio of 0.7866 Ventas shares for each NHP share they own), while assuming $1.6 billion in debt. Ventas will control more than 1,300 properties, spread across 47 states and Canada, as the combined company will have a pro forma enterprise value of roughly $23 billion. The companies expect the transaction to close in the third quarter this year.
THE BIG PICTURE
The health care REIT market has been heating up recently. In a separate transaction this week, Health Care REIT Inc. agreed to buy the real estate assets of Genesis HealthCare. In October, Ventas agreed to buy Atria Senior Living Group--that deal is expected to close in April.
Debra Cafaro, Ventas's chairwoman and chief executive, told The New York Times this week that she expects even more consolidation in this sector to come and her company is already in a prime spot in the market.
"The combination will put Ventas in a terrific position to compete for the many expected acquisition opportunities in the health care real estate space," Panovka says. "Demand for health care real estate is growing, while supply is constrained, with limited new development in the pipeline."
Health care is "one of the largest, most dynamic, and most attractive sectors of the real estate industry," he adds. There are more than $700 billion in health care-related real assets and less than 10 percent of those properties are held by REITS, he says.
Panovka has known the company's CEO, Cafaro, for years. He calls her "one of the smartest and most talented CEOs out there." Cafaro is a former corporate and real estate partner at Barack Ferrazzano Kirschbaum & Nagelberg, which assisted Wachtell on local real estate matters on the two recent Ventas deals. She has been CEO of Ventas since 1999.
Wachtell has handled a variety of corporate work for Ventas over the past few years, but first did M&A work for the company in 2007, when Ventas paid almost $2 billion for Sunrise Senior Living REIT. The firm also advised on Ventas's $1.5 billion cash-and-stock deal to acquire Atria Senior Living Group last October.
Wachtell, and Panovka, worked on similar deals in the past, but the structure of this transaction offered a departure from the Atria deal for Panovka's team. Where that transaction featured a public company buying a private company outright, this one saw a merger of two publicly traded companies.
Panovka says his deal team included lawyers from "literally every department in our firm." Those lawyers worked closely with a Ventas legal department led by general counsel T. Richard Riney, and including Ventas VP and transactions counsel Joe Lambert and vice president and senior securities counsel Kristen Benson.Make a comment