Medical Properties Trust, Birmingham, Ala., has signed an agreement to purchase most of the real estate assets of inpatient rehabilitation and long-term acute-care provider Ernest Health, Albuquerque, as well as a portion of the operations of the 16-hospital investor-owned chain.
Medical Properties to buy Ernest Health real estate
Medical Properties agreed to pay $200 million for 12 of Ernest's hospitals, which will be leased by the new operators of the hospitals, a joint venture between a Medical Properties affiliate and Ernest management, according to a news release from Medical Properties.
The four remaining hospitals will serve as collateral for a $100 million master mortgage loan by Medical Properties to Ernest with terms that are similar to the 20-year master lease signed for the other hospitals.
Also, the joint venture will pay $100 million for Ernest Health, with $95 million of that funded by Medical Properties Trust, giving Medical properties “rights to a significant percentage of the profits and distributions of Ernest,” according to the release.
Ernest will be managed by its current executives including its CEO Darby Brockette, according to the release. The deal is subject to regulatory and other customary conditions.
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