Omega Healthcare Investors and Aviv REIT Merging

October 31, 2014

 

October 31, 2014.  In a surprise announcement, Omega Healthcare Investors and Aviv REIT have agreed to merge, creating the largest REIT in the country with a skilled nursing facility focus. Including assumed debt, the deal comes with a value for Aviv of approximately $3.0 billion, and Aviv shareholders will be receiving a 16.2% premium over the closing price on October 30. The combined entity will be a $10 billion REIT, moving it up to the fourth largest healthcare REIT.

 
Aviv’s share price obviously jumped by 14% in initial trading, but Omega’s price dropped a bit, despite the fact that the transaction will be accretive and that on a combined basis, Omega’s 2015 adjusted per share funds available for distribution to shareholders is expected to be nearly 10% higher than Omega’s 2014 guidance. If you like the skilled nursing sector and its prospects in the changing post-acute environment, you’ve got to like this merger. Omega’s Taylor Pickett will remain as CEO of the combined REITs, Aviv’s Craig Bernfield will join Omega’s board, Steven Insoft will stay in Chicago and continue Aviv’s acquisition and development roll-out, and Dan Booth and Bob Stephenson of Omega will retain their roles as COO and CFO of Omega, respectively.
 

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