Sabra Health Care REIT Inc. in Irvine and Care Capital Properties Inc. in Chicago plan an all-stock merger that’s expected to close in the third quarter.
Sabra looks to be the surviving name—Care Capital shareholders get 1.123 shares of Sabra stock for their CCP stock in the deal—but CCP holders will own 59% of the new entity.
The combined company will be based in Irvine.
Sabra Chairman and Chief Executive Rick Matros will hold the same roles in the new company. Care Capital Chief Executive Raymond Lewis and two other CCP directors will join an expanded Sabra board.
The combined company will own 564 facilities run by 70 different operators in 43 states and Canada. A press release said the deal creates “a balanced portfolio in the assisted living, independent living and skilled nursing facility asset classes.”
Sabra earned net income of about $70 million on revenue of about $233 million in 2016; Care Capital earned net income of $123 million on revenue of $339 million last year.
Sabra shares were down about 4% in recent trading to a $1.7 billion market cap; Care Capital was up about 6% to a $2.4 billion market cap.
UBS advised Sabra on financial elements of the deal while O’Melveny & Myers LLP and Fried, Frank, Harris, Shriver & Jacobson LLP handled the local REIT’s legal advice on the transaction.
BofA Merrill Lynch and Barclays were financial advisors to CCP; Sidley Austin LLP was its legal advisor.