CapitalSource (CSE) to Sell Healthcare Net Lease Portfolio to Omega Healthcare Investors (OHI)
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CapitalSource Inc. (NYSE: CSE) today announced that it has entered into a definitive agreement to sell substantially all of its healthcare net lease portfolio to Omega Healthcare Investors, Inc. (NYSE: OHI), subject to usual and customary closing conditions and adjustments. The sale, covering 143 long term care facilities, will be completed in a series of closings. Expected net proceeds to CapitalSource include $280 million cash and $51 million of OHI stock. Omega is expected to assume or pay off $529 million of debt related to the assets being purchased. CapitalSource owns 38 additional long term care facilities not included in this sale, but which the Company expects to sell separately.
The sale to Omega will be completed in three steps. The first two are expected to be completed by the end of the second quarter of 2010 and will result in net proceeds to CapitalSource of $250 million in cash and $51 million of Omega stock. The first closing, expected to occur in late December or January, will cover 40 facilities for a purchase price of $269 million and will also include Omega's payment of $25 million for an option to purchase 63 facilities for an additional $295 million or a total purchase price of $320 million. The second closing is expected to occur in the second quarter of 2010 and will cover 40 facilities for a purchase price of $271 million. Omega will assume a total of $264 million of indebtedness relating to the facilities sold in the first two transactions.
The third closing for the remaining 63 facilities, at a purchase price of $320 million, would occur upon Omega's exercise of its purchase option prior to 12/31/11. The consideration would consist largely of the extinguishment of $265 million of indebtedness relating to the facilities sold in the transaction, plus $30 million in cash, in addition to the previously paid purchase option of $25 million.
Wells Fargo Securities LLC acted as lead advisor to CapitalSource on the transaction.
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