US healthcare real estate investment trust CareTrust is acquiring CARE REIT (CRT) for £448m (€531m), marking its entry into the UK market.
CareTrust is offering shareholders of London-listed CRT shareholders 108p in cash for each share held, a 32.8% uplift to CRT’s last closing price of 81.3p.
CRT, launched in March 2017, invests in long-leased healthcare real estate assets in the UK. The company’s property portfolio was valued at approximately £679m as at 31 December 2024.
NYSE-listed CareTrust, which owns a portfolio of seniors housing and healthcare-related properties spanning 34 states in the US with a $4.9bn (£3.8bn) market capitalisation has “spent considerable time evaluating its entry into the UK market and sees attractive underlying dynamics driven by demographics”.
“The acquisition of CRT brings a diversified and attractive portfolio of properties in the UK with established operator relationships, providing CareTrust with a platform from which to grow,” CareTrust added.
CRT said it believes CareTrust’s offer allows CRT shareholders the opportunity to exit fully in cash at a price comfortably in excess of what could be achieved via trading shares in a relatively illiquid open market, and as such unanimously recommends the acquisition to CRT shareholders.
Dave Sedgwick, president and CEO of CareTrust, said: “We have been following the UK for some time looking for the right entry point. We believe we have found it in the Care REIT plc platform, which has assembled what we consider to be an excellent, diversified portfolio of UK assets and operator partnerships.
“We look forward to combining the Care REIT plc platform with our own and expanding our mission of growing with great operators in the UK.”
Simon Laffin, chair of CRT, said Care REIT has, since its initial public offering (IPO) in 2017, built a portfolio of homes and tenants while delivering a total accounting return of 70.2%.
“However, UK investor sentiment has been negative on the UK listed REIT sector over the last few years, exacerbated by the weak macro-economic backdrop and high interest rates, leading to shares trading at significant discounts to net asset value.”
Laffin said the company has achieved an EPS CAGR of 6.2% and unbroken dividend growth with a CAGR of 2% since IPO.
“However, despite the operational progress, Care REIT has traded significantly below its net asset value over the last few years, with no sign of this improving in at least the short to medium term. This has made it almost impossible for Care REIT to raise new capital to grow the business.
“Becoming part of the $5bn CareTrust would enable the business to grow and to play a larger role in the UK’s fragmented residential care sector.”
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