Ventas Parent to Take Majority Stake in Ardent Health Services

By Angela Chen 

Ventas Inc. has agreed to a deal along with Equity Group Investments to take a majority ownership of Ardent Health Services, the hospital operator Ventas had agreed to buy earlier this year.

In April, Ventas said it planned to buy Ardent for $1.75 billion in cash and said it would spin off most of its skilled-nursing facilities into an independent real-estate investment trust.

Now the hospital operations of Ardent will be majority owned by EGI, with Ventas taking a 9.9% interest. Current Ardent management will hold a significant ownership stake in the company. Nashville-based Ardent is one of the largest for-profit hospital operators in the U.S. and generates about $2 billion in annual revenue.

The companies said Tuesday's deal values Ardent at about $475 million.

After closing, Ventas and Ardent will enter triple-net leases with an initial annual base rent of $105 million. Ventas expects the cash rental yield on its real-estate investment to be about 7.5%.

"With Ardent, we are well positioned to grow in the large, fragmented and rapidly consolidating $1 trillion domestic hospital segment," said Ventas Chief Executive Debra Cafaro.

The deal is expected to close in the third quarter. Ardent will continue to be led by its current management in Nashville.

Shares of Ventas, inactive premarket, have fallen about 12% this year through Monday's close.

Write to Angela Chen at [e-mail]

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