Healthpeak Properties and Physicians Realty Trust announced on October 30 that they have entered into a definitive agreement to combine in an all-stock merger of equals valued at approximately $21 billion.
According to data captured in the LevinPro HC database, this transaction marks the second largest healthcare transaction of 2023 by purchase price, behind Pfizer‘s $43 billion acquisition of Seagen Inc. announced in March.
Physicians Realty Trust is a self-managed healthcare real estate company organized to acquire, develop, own and manage healthcare properties that are leased to physicians, hospitals and healthcare delivery systems. According to its 2022 financial reports, Physicians Realty Trust’s total revenue for 2022 was approximately $527 million, and EBITDA was about $325 million.
Healthpeak Properties, Inc. (formerly known as HCP, Inc.) is one of the largest healthcare REITs in the country, with investments across the healthcare spectrum, including hospitals, seniors housing, life sciences and medical office buildings.
The combined company will be the leading real estate platform dedicated to healthcare discovery and delivery with a 52 million square foot portfolio, including 40 million square feet of outpatient medical properties concentrated in high-growth markets such as Dallas, Houston, Nashville, Phoenix and Denver. The merged company also will benefit from both companies’ extensive relationships with the nation’s leading health systems.
Upon completion of the merger, the combined company will be led by Scott Brinker as President and Chief Executive Officer, Peter Scott as Chief Financial Officer and John Thomas as Vice Chair of the Board. The combined company will operate with the Healthpeak Properties, Inc. name and is expected to trade under the ticker symbol “DOC” on the New York Stock Exchange. The headquarters of the combined company will be in Denver and it will maintain other existing offices.
The all-stock merger is intended to be a tax-free transaction and is expected to close in the first half of 2024. Under the terms of the agreement, each Physicians Realty Trust common share will be converted into 0.674 of a newly issued Healthpeak common share. Pro forma for the transaction, Healthpeak and Physicians Realty Trust shareholders will own approximately 77% and 23% of the combined company, respectively. The merger is expected to generate run-rate synergies of at least $40 million by the end of year one and up to $60 million by the end of year two.
Barclays and Morgan Stanley & Co. LLC are serving as lead financial advisors, J.P. Morgan, Mizuho Securities USA LLC, RBC Capital Markets and Wells Fargo are serving as additional financial advisors and Latham & Watkins LLP is acting as legal advisor to Healthpeak. BofA Securities and KeyBanc Capital Markets Inc. are serving as lead financial advisors, BMO Capital Markets Corp. is serving as financial advisor and Baker McKenzie is acting as legal advisor to Physicians Realty Trust.
