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Medical Properties (MPW) Taps Equity Market to Fund Buyout

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Zacks Equity Research
·3 min read
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Medical Properties Trust, Inc. MPW has priced a public offering of 32 million shares of its common stock at $20.05 per share. Moreover, the underwriters have been granted a 30-day option to purchase an additional 4.8 million shares of its common stock.

The company anticipates net proceeds of $618.1 million from the offering, after accounting for underwriting discounts and commissions as well as offering expenses. If underwriters exercise their option to purchase additional shares in full, net proceeds are likely to increase to $711 million.

The company plans to partly fund the recently-announced acquisition of a portfolio of behavioral healthcare real estate assets from the net proceeds from the offering. Markedly, the offering is not dependent on the successful completion of the buyout.

In fact, following the allocation referenced above, any remaining net proceeds from the offering will be used for general corporate purposes, inclusive of debt repayment, working capital and capital expenditure, and potential buyouts.

Specifically, on Jan 6, the company entered definitive agreements to buy a portfolio of select behavioral health facilities in the U.K. for nearly £800 million. These facilities are presently owned and operated by behavioral health provider Priory Group. These properties will be subject to sale-leaseback agreements with Priory over a long-term period.

Amid projected strong growth in the U.K.-behavioral health marketplace, the acquisition will expand the company’s coverage in the region as well as asset class. Notably, the portfolio consists of Priory’s most acute behavioral health facilities and will be leased for an initial fixed-term of 25 years, with two 10-year extension options. The sale-leaseback transactions are anticipated to close in the first half of 2021, subject to customary closing norms.

Shares of this Zacks Rank #3 (Hold) company have rallied 12.4% over the past three months against the industry's decline of 2.2%.

 

 

Stocks to Consider

CubeSmart’s CUBE Zacks Consensus Estimate for 2021 funds from operations (FFO) per share has moved up marginally to $1.78 in the past month. The company currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Extra Space Storage Inc.’s EXR FFO per share estimate for the current year has been revised marginally upward to $5.44 in the past week. The company carries a Zacks Rank of 2, currently.

City Office REIT, Inc.’s CIO Zacks Consensus Estimate for the ongoing-year FFO per share has been unchanged at $1.32 in a month’s time. The company has a Zacks Rank of 2 at present.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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Medical Properties Trust, Inc. (MPW) : Free Stock Analysis Report
 
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