Omega purchases Aviv REIT for $3 billion

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Aviv CEO and board chairman Craig M. Bernfield
Aviv CEO and board chairman Craig M. Bernfield

Omega Healthcare Investors is poised to own nearly 875 skilled nursing properties across 41 states, following its merger with Aviv REIT in a $3 billion deal announced Friday.

The all-stock deal will create the nation's “premier publicly traded pure-play skilled nursing facility real estate investment trust,” the companies stated in joint press releases.

The combination of the powerhouse REITs is just the latest mega-deal in the long-term care sector, and it signals further consolidation is coming. The combined organization will be “well-positioned” as the “leading consolidator in the large, highly fragmented SNF industry,” Omega Chief Executive Officer Taylor Pickett stated. His counterpart at Aviv — CEO and Chairman Craig Bernfield — also emphasized this idea.

The combined entity will be able to better identify both “attractive off market” and “widely marketed” acquisition opportunities, Bernfield stated.

Pickett will serve as CEO, and Bernfield will be on the Board of Directors. The merger will allow for reduced administrative costs and should make capital more accessible and cheaper, the leaders explained.

Under the terms of the deal, each Aviv shareholder would receive 0.90 Omega shares for each of Aviv share, which would be the equivalent of about $35 of Omega stock for each Aviv share. This represents a 16% premium for Aviv shareholders, based on that company's closing price on Oct. 30.

Aviv's share price rose by double digits early Friday, after the merger was announced, USA Today reported.

The deal is expected to close in the first quarter of 2015.