
Welltower, a US-based real estate investment trust (REIT) focused on healthcare infrastructure, has agreed to acquire NorthStar Healthcare Income for an enterprise value of $900m.
NorthStar Healthcare Income is also a REIT that owns a diversified portfolio of senior housing properties located throughout the US.
Under the terms of the merger agreement, an affiliate of Welltower will purchase shares of NorthStar Healthcare Income at $3.03 per share in cash, for an enterprise value of $900m.
The consideration exceeds the net asset value per share of $2.96 determined by NorthStar Healthcare’s board of directors as of 30 June 2024.
The proposed transaction, which has been unanimously approved by NorthStar Healthcare’s board of directors, is expected to close in the first half of 2025.
Its closing is subject to customary closing conditions, including approval by NorthStar Healthcare’s stockholders through voting at a special meeting.
Welltower co-president and chief investment officer Nikhil Chaudhri said: “Welltower anticipates will be allocated to an entity affiliated with its recently announced funds management business.
“We expect that this portfolio will serve to further enhance our regional densification strategy through our existing geographic footprint and network of exceptional senior housing operators.
“It has been a pleasure to work with Kendall and the NorthStar team to attain this win-win outcome for shareholders of both companies.”
NorthStar Healthcare’s board of directors and advisors may initiate, solicit and consider alternative acquisition proposals until 40 days from the agreement date.
The company also holds the right to terminate the current merger agreement and accept a superior proposal, subject to the terms and conditions of the agreement.
CS Capital Advisors served as the financial advisor, and Morrison & Foerster as the legal advisor, to NorthStar Healthcare, on this transaction.
NorthStar Healthcare CEO and president Kendall Young said: “Over the past few years, we have been executing a disciplined strategy to improve the performance of our portfolio and opportunistically pursue dispositions, to create value and position NorthStar Healthcare for a liquidity event.
“We are pleased to have reached this agreement with Welltower, which is the culmination of these efforts and a great outcome for our stockholders, delivering a compelling, certain, cash value for their shares.”
In a separate development, Welltower has launched its private funds management business to manage third-party capital.
The new business will pursue opportunities to invest across the capital structure in the healthcare and wellness real estate sectors.
Also, the fund will leverage Welltower’s data science platform to identify and acquire senior housing portfolios in the US.