Sabra Health Care, CCP to team up in $7.4 billion deal

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The merger will increase portfolio diversification, Matros says.
The merger will increase portfolio diversification, Matros says.

Care Capital Properties and Sabra Health Care REIT will join forces to create a “premier” healthcare real estate investment trust, the companies announced in May.

The combined REIT, which will operate under the Sabra name, is expected to have a pro forma total market capitalization and an equity market capitalization of around $4.3 billion. The new company will be led by Sabra's current management team, with Rick Matros as chairman and CEO.

The merger will create “enhanced growth opportunities to strategically partner with top operators,” the companies said in a joint press release.

“Our balance sheet and access to capital will enable us to continue investing in senior housing assets to balance our portfolio mix, as we did after our spin-off,” Matros said. “The increased scale and portfolio diversification, strengthened balance sheet and earnings profile delivered through the merger position us to capitalize on the opportunity set in front of us in an industry that continues to have attractive fundamentals.”

Care Capital Properties CEO Raymond Lewis added that the move also will create a “solid foundation” that will help the REIT “compete and win in the dynamic and growing healthcare real estate market.”

The combined company will have “a diversified portfolio of quality operators and assets, with strong free cash flow, a rock solid balance sheet and a highly competitive cost of capital,” he added.

In total, the new company will have a healthcare portfolio of 564 investments, including skilled nursing and assisted living facilities across 43 states and Canada. 

The merger also is expected to create annual cost savings of around $20 million, and improve tenant diversification by geography, asset type and operator, officials said.

The new REIT will be headquartered in Irvine, CA.