Capella Healthcare, the privately held, Franklin, Tenn.-based chain, Tuesday announced it has finalized its $900 million sale to a real estate investment trust.
In the deal, Medical Properties Trust acquires Capella's properties and a minority ownership in operations.
“This is an unprecedented collaboration that benefits all of our stakeholders, our patients and communities first and foremost,” said Michael Wiechart, president and CEO of Capella. “The funding being provided through our partnering with Medical Properties Trust enables us to take care to the next level as we build upon our legacy of service to our existing community hospitals. Equally vital, it fuels our long-term growth plans, allowing us to serve additional communities during this time of unique opportunity for the healthcare industry.”
GTCR has owned Capella since its founding in 2005. GTCR's equity investments and commitment to Capella have allowed the company to grow steadily over the last 10 years.
The deals continue for Capella, which was bought out of a joint venture by Ascension in July 2015.
Medical Properties Trust has significant expertise in healthcare real estate, efficient access to capital markets and, most importantly, a company culture that is compatible with Capella's mission, vision and values, Wiechart said.
“We are delighted to have earned the confidence of Capella Healthcare as it further expands its footprint across the country,” said Edward Aldag Jr., Medical Properties Trust's chairman and CEO.
Capella reported total revenue of $695 million in fiscal 2014, a 5.9% increase over 2013, according to Modern Healthcare's Healthcare Systems Financial Database.
In July, Capella said it would sell its majority stake in four Tennessee hospitals to Ascension subsidiary St. Thomas Health, its joint venture partner in the state since 2012. The chain has been selling assets in Tennessee and Missouri but recently agreed to buy two hospitals in the Pacific Northwest.
Capella's is the second transaction this year in which a REIT purchased a hospital operating company and separated its real estate from its operations. In April, Ventas entered into a $1.75 billion deal to acquire Ardent Medical Services from its private equity owner Welsh, Carson, Anderson & Stowe.
As more care moves to the outpatient setting, hospitals are stripping their bloated real estate portfolios. For REITs, the unused space presents an opportunity to expand into lower-acuity services such as rehabilitation and assisted living.
