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Sabra Health Care REIT Completes $7.4B Merger with Care Capital Properties
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Irvine, CA-based Sabra Health Care REIT Inc. and Chicago-based Care Capital Properties Inc. completed an all-stock $7.4 billion merger that creates a 564-property portfolio of skilled nursing and senior housing facilities. Each outstanding share of Care Capital common stock is converted into 1.123 shares of Sabra common stock.
There was some investor backlash to the deal, since Sabra’s portfolio will have greater exposure to skilled nursing facilities, increasing from 57% to 73%. Recently, REITs have moved to reduce exposure to that class of asset resulting from reimbursement model changes.
Sabra’s Rick Matros says, “With our enhanced financial strength and access to capital, we expect to continue to diversify our portfolio by tenant and facility type. Further, we expect the merger’s significant cash flow accretion will provide the potential for a meaningful near-term dividend increase and enhance value for our shareholders.”
The transaction is expected to generate annual cost savings of roughly $20 million.
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