8-KMaterial AgreementsRegulation FDExhibits & Filings

WELLTOWER INC. 8-K Report, Material Agreement (Feb 28, 2011)

Filed February 28, 2011For Securities:WELL

Summary

On February 28, 2011, Health Care REIT, Inc. (now Welltower Inc.) announced a significant acquisition of FC-GEN Acquisition Holding for $2.4 billion. This strategic move will expand the company's portfolio by acquiring 100% of the equity interests in FC-GEN Acquisition Holding, which indirectly owns 140 senior housing and care facilities (137 fee simple, 3 ground leases) and leasehold interests in seven additional facilities, all operating under the Genesis HealthCare name in the Northeast and Mid-Atlantic regions. The transaction is structured with an immediate entry into a Master Lease agreement with Genesis Operations, LLC (Tenant) for the acquired facilities, with an initial term of 15 years. This Master Lease will generate approximately $198 million in base rent for the first year, with annual escalations. The company also secured a $2.4 billion bridge loan facility to fund the acquisition, demonstrating its ability to finance such a substantial transaction.

Key Highlights

  • 1Health Care REIT, Inc. (WELL) entered into a definitive purchase agreement to acquire 100% of FC-GEN Acquisition Holding for $2.4 billion.
  • 2The acquisition includes 140 senior housing and care facilities (owned or ground leased) and leasehold interests in 7 additional facilities, operating as Genesis HealthCare.
  • 3The acquired facilities are located in the Northeast and Mid-Atlantic regions of the U.S.
  • 4Post-acquisition, a Master Lease agreement will be established with Genesis Operations, LLC, with an initial 15-year term and annual rent escalations.
  • 5The Master Lease is expected to generate approximately $198 million in base rent for the first year.
  • 6WELL secured a $2.4 billion bridge loan facility to finance the acquisition and related expenses.
  • 7The company has an option to acquire a 9.9% ownership interest in OpCo for $47 million during the initial 15-year Master Lease term.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Health Care REIT, Inc.'s entry into a material definitive agreement for the acquisition of FC-GEN Acquisition Holding for approximately $2.4 billion. It also details the financing arrangements, specifically a $2.4 billion bridge loan facility, and the subsequent Master Lease agreement for the acquired properties.

The company is acquiring 100% of the equity interests of FC-GEN Acquisition Holding. This entity indirectly owns 140 senior housing and care facilities (137 fee simple and 3 ground leases) and has leasehold interests in and an option to purchase 7 additional senior housing and care facilities. These facilities operate under the Genesis HealthCare name in the Northeast and Mid-Atlantic regions.

The acquisition is being financed through a $2.4 billion bridge loan facility committed by a syndicate of lenders, including UBS, Bank of America, Merrill Lynch, Barclays, Deutsche Bank, JPMorgan Chase, and Wells Fargo. The proceeds from this facility are intended to fund the acquisition consideration and related fees and expenses.

Immediately following the acquisition, a subsidiary of Health Care REIT will enter into a Master Lease with Genesis Operations, LLC (Tenant) for the acquired facilities. The initial term is 15 years with a renewal option for another 15 years. The base rent for the first year is set at $198 million, with annual rent increases ranging from 1.50% to 3.50% depending on the year and subject to CPI changes. Tenant is responsible for all operating costs and expenses associated with the facilities.