NorthWest International Healthcare Properties REIT Announces Definitive Agreement to Internalize Management

TORONTO, Jan. 7, 2015 /CNW/ - NorthWest International Healthcare Properties Real Estate Investment Trust (TSXV: MOB.UN) (the "REIT") announced today that it has entered into a binding agreement with NorthWest Value Partners Inc. ("NWVP") to internalize the external management of the REIT (the "Internalization") effective January 1, 2015. 

As previously disclosed, the REIT will internalize the asset management, property management and development functions of the REIT currently carried on by affiliates of NWVP. The REIT will also acquire from NWVP all of the rights and obligations relating to the management of Vital Healthcare Property Trust.

In consideration for the Internalization assets transferred to the REIT, NWVP will be entitled to receive the total amount that would be paid under the existing external management arrangements and fees earned by Vital Healthcare Management Limited, as external manager of Vital Healthcare Property Trust, for the 12 months ending December 31, 2014, adjusted for the full year effect of acquisitions and committed capital. This amount is estimated to be approximately $6.6 million. In connection with the Internalization, the REIT will be issuing deferred units under its deferred unit plan to new employees of the REIT (other than Paul Dalla Lana) in the amount of approximately $8.1 million.  Accordingly, NWVP will issue to the REIT an offsetting $1.5 million non-interest bearing promissory note, due on demand. The Internalization will not have a cash impact on the REIT.

The Internalization is expected to close during the first quarter of 2015, subject to certain conditions. These conditions include receipt of all necessary regulatory approvals, including receipt of the Foreign Investment Review Board in Australia and the approval of the TSX Venture Exchange.

"We are excited to have achieved this significant strategic milestone towards the internalization of the REIT's management team", said Paul Dalla Lana, Chief Executive Officer and Chairman of the REIT. "The existing team of the asset manager, as well as the Vital manager, and underlying platforms, will soon join the REIT consisting of approximately 41 professionals across 5 major regions globally. I believe this fully-integrated internal management structure will help support the long-term success of the REIT".

NWVP currently owns an approximate 65% interest in the REIT and Paul Dalla Lana, Chairman and Chief Executive Officer of the REIT, is the sole shareholder of NWVP. Accordingly, the Internalization is a "related party transaction" for the purposes Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). A special committee of independent trustees was established by the REIT for the purposes of considering the Internalization. The special committee retained independent legal and financial advisors in connection with the Internalization. The Internalization is not subject to the formal valuation and minority approval requirements of MI 61-101 as neither the fair market value nor the subject matter of the transaction represents more than 25% of the REIT's market capitalization.

"The REIT has negotiated a fair agreement to internalize its management that is consistent with the arrangement previously disclosed in the REIT's press release of April 30, 2014", said Robert Baron, Chairman of the Special Committee of the REIT. "The special committee believes that a fully integrated internal management platform best positions the REIT to execute on its growth strategy going forward."

About NorthWest International Healthcare Properties Real Estate Investment Trust

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT's objectives are to: (i) provide its unitholders with cash distributions from investments focused on international healthcare properties, on a tax efficient basis; (ii) enhance the value of the REIT's assets and maximize long-term unit value; and (iii) expand the asset base of the REIT.

Forward Looking Information

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including the statements regarding the proposed use of the net proceeds from the Offering. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the risk that the Internalization will not be completed on the terms proposed or that all regulatory approvals will not be obtained. The statements in this news release are made as of the date of this release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although the REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. A discussion of the risk factors applicable to the REIT is contained under the heading "Risk Factors" in the REIT's annual information form dated April 23, 2014 and audited consolidated financial statements and management's discussion and analysis for the year ended December 31, 2013, copies of which may be obtained on the SEDAR website at www.sedar.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE NorthWest International Healthcare Properties REIT

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