Market Overview

Omega Healthcare Investors to Acquire MedEquities Realty Trust

  • Anticipated annual FFO, AFFO and FAD accretion of approximately $0.05
    per Omega share.
  • Operator diversification will increase with 9 new operators.
  • Property type diversification will increase non-skilled nursing assets
    modestly by $296 million, including $75 million invested in a hospital
    facility leased to a subsidiary of Baylor, Scott & White Health.
  • Significant synergies expected.
  • Omega will acquire the fee simple interest in 34 facilities operated
    by 11 operators in 7 states.
  • Omega will acquire approximately $34 million in mortgage loans.

Omega Healthcare Investors, Inc. (NYSE:OHI) ("Omega") and MedEquities
Realty Trust, Inc. (NYSE:MRT) ("MedEquities") today announced the
execution of a definitive merger agreement under which Omega will
acquire all of the outstanding shares of MedEquities. The transaction
represents an enterprise value of approximately $600 million for
MedEquities and further diversifies Omega's assets and operators. The
boards of directors of both companies have unanimously approved the

Under the terms of the agreement, MedEquities stockholders will receive
a fixed exchange ratio of 0.235 Omega common shares plus $2.00 in cash
for each share of MedEquities common stock held by them, which
represents a value of $10.26 per MedEquities share based on the $35.15
closing price for Omega common stock on December 31, 2018. Separately,
MedEquities will declare a special cash dividend of $0.21 per share
payable to the holders of record of MedEquities common stock as of the
end of trading on the New York Stock Exchange on the trading day
immediately prior to the closing date of the transaction. There are no
changes planned to Omega's board of directors or executive officers
related to the merger transaction.

Taylor Pickett, Omega's Chief Executive Officer stated, "John and his
team have built a high quality diversified portfolio, which should
provide Omega with meaningful future growth opportunities." Mr. Pickett
continued, "This acquisition reinforces our commitment to the skilled
nursing and senior housing industry, while adding new asset types to our
portfolio furthering our strategic objectives."

John McRoberts, Chairman and Chief Executive Officer of MedEquities
added, "This is a very compelling transaction for MedEquities'
stockholders. We believe going forward that our stockholders will be in
an excellent position from having an investment in Omega's diversified
portfolio. Taylor and his team have a long and successful history of
asset growth and diversification as well as solid asset management.
Additionally, our operators will benefit from Omega's depth of knowledge
of the healthcare industry, their strong capital position and their
commitment to support and grow with their tenants."

Approvals and Timing

Completion of the transaction is subject to satisfaction of customary
closing conditions, including the approval by the stockholders of
MedEquities. The transaction is expected to close in the first half of
2019. Completion of the transaction is not subject to approval by
Omega's stockholders and is not subject to any financing contingency.

Bryan Cave Leighton Paisner LLP is serving as legal advisor to Omega.
Morrison & Foerster LLP is serving as legal advisor and Citigroup Global
Markets Inc. is serving as exclusive financial advisor to MedEquities.

About Omega

Omega is a real estate investment trust that invests in the long-term
healthcare industry, primarily in skilled nursing and assisted living
facilities. Its portfolio of assets is operated by a diverse group of
healthcare companies, predominantly in a triple-net lease structure. The
assets span all regions within the US, as well as in the UK.

About MedEquities

MedEquities Realty Trust is a self-managed and self-administered real
estate investment trust that invests in a mix of healthcare properties
and healthcare-related real estate debt investments within the acute,
post-acute and behavioral sectors of healthcare services. MedEquities'
strategy has been to become an integral capital partner with
high-quality and growth-oriented facility-based providers of healthcare
services on a nationwide basis, primarily through net-leased real estate

Additional Information and Where to Find It

In connection with the proposed transaction, Omega will file a
registration statement on Form S-4 with the Securities and Exchange
Commission ("SEC") that includes the preliminary proxy statement of
MedEquities and that also constitutes a preliminary prospectus of Omega.
After the registration statement is declared effective, MedEquities
plans to mail to its stockholders the definitive proxy
statement/prospectus. MedEquities and Omega may also file other
documents with the SEC regarding the proposed transaction. This document
is not a substitute for the proxy statement/prospectus or registration
statement or any other document which MedEquities or Omega may file with
the SEC. Investors are urged to read the registration statement, the
proxy statement/prospectus and any other relevant documents when they
are available, as well as any amendments or supplements to these
documents, carefully and in their entirety because they contain
important information.

Investors may obtain free copies of the registration statement,
including the preliminary proxy statement/prospectus, and other relevant
documents filed by Omega and MedEquities with the SEC through the
website maintained by the SEC at,
or by contacting MedEquities at 3100 West End Avenue, Suite 1000,
Nashville, Tennessee 37203 Attn: Tripp Sullivan, (615) 760-1104, or
Omega at Omega Healthcare Investors, Inc. 303 International Circle,
Suite 200 Hunt Valley, Maryland 21030, Attn: Matthew Gourmand, Senior VP
of Investor Relations, (410) 427-1714.

Participants in the Solicitation

Omega, MedEquities and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from
MedEquities' stockholders in respect of the proposed transaction.
Information regarding Omega's directors and executive officers can be
found in Omega's definitive proxy statement filed with the SEC on April
30, 2018, its Form 10-K filed with the SEC on February 23, 2018, and its
Form 8-K reports filed with the SEC on October 25, 2018 and November 2,
2018, as well as its other filings with the SEC. Information regarding
the directors and executive officers of MedEquities can be found in its
definitive proxy statement filed with the SEC on April 16, 2018, as well
as its other filings with the SEC. Additional information regarding the
interests of such potential participants will be included in the
registration statement, proxy statement/prospectus and other relevant
documents to be filed with the SEC in connection with the proposed
transaction. These documents will be available free of charge on the
SEC's website and from Omega and MedEquities, as applicable, using the
sources indicated above.

No Offer or Solicitation

This communication is not intended to and does not constitute an offer
to sell or the solicitation of an offer to buy, sell or solicit any
securities or any proxy, vote or approval, nor shall there be any sale
of securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities shall
be deemed to be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.

Forward-Looking Statements

Certain statements in this document constitute "forward-looking
statements" within the meaning of the federal securities laws, including
all statements regarding the proposed transaction, future financial
position and financial metrics, expected synergies and benefits,
dividends and dividend plans, financing plans, and other expectations
and beliefs regarding future events. In some cases, you can identify
forward-looking statements by the use of forward-looking terminology
including "anticipate," "if," "believe," "plan," "estimate," "expect,"
"intend," "may," "could," "should," "would," "will," "seeks,"
"approximately," "outlook," "looking forward" and other similar
expressions or the negative forms of the same. Omega and MedEquities
caution readers that these and other forward-looking statements are not
guarantees of future results and are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially from
those expressed in any forward-looking statements. Important risk
factors that may cause such a difference include, but are not limited to
risks and uncertainties related to i) the risk that the conditions to
closing of the merger may not be satisfied; ii) the ability of Omega to
integrate the acquired business successfully and to achieve anticipated
cost savings and other synergies; iii) the possibility that other
anticipated benefits of the proposed transaction will not be realized,
including without limitation, anticipated revenues, expenses, earnings
and other financial results; iv) potential litigation relating to the
proposed transaction that could be instituted; v) the ability to meet
expectations regarding the timing and closing of the transaction; vi)
possible disruptions from the proposed transaction that could harm the
business of the companies; vii) the ability of each company's operators
and borrowers to maintain the financial strength and liquidity necessary
to satisfy their respective rent and debt obligations; viii) the impact
of healthcare reform and regulation, including cost containment measures
and changes in reimbursement policies, procedures and rates; and ix) the
risk factors described in the most recent Annual Reports on Form 10-K
and other filings of Omega and MedEquities with the SEC. Many of these
factors are beyond the control of the companies and their management.
The list of factors presented here should not be considered to be a
complete statement of all potential risks and uncertainties. Unlisted
factors may present significant additional obstacles or impediments to
the realization of forward looking statements. Neither Omega nor
MedEquities assumes any obligation to provide revisions or updates to
any forward looking statements, whether as a result of new information,
future developments or otherwise, should circumstances change, except as
otherwise required by securities and other applicable laws.

Non-GAAP Measures

Funds From Operations ("FFO"), Adjusted FFO and Funds Available for
Distribution ("FAD") are non-GAAP financial measures. Omega calculates
and reports FFO in accordance with the definition and interpretive
guidelines issued by the National Association of Real Estate Investment
Trusts ("NAREIT"), and consequently, FFO is defined as net income
(computed in accordance with GAAP), adjusted for the effects of asset
dispositions and certain non-cash items, primarily depreciation and
amortization and impairments on real estate assets, and after
adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures will be
calculated to reflect funds from operations on the same basis. FFO
described herein is not necessarily comparable to FFO of other real
estate investment trusts that do not use the same definition or
implementation guidelines or interpret the standards differently from
Omega or MedEquities.

Adjusted FFO is calculated as FFO excluding the impact of non-cash
stock-based compensation and certain revenue and expense items
identified above. FAD is calculated as Adjusted FFO less non-cash
interest expense and non-cash revenue, such as straight-line rent.
Omega's computation of Adjusted FFO and FAD are not comparable to the
NAREIT definition of FFO or to similar measures reported by other
real-estate investment trusts.

These non-GAAP measures are not measures of financial performance under
GAAP and should not be considered as measures of liquidity, alternatives
to net income or indicators of any other performance measure determined
in accordance with GAAP. Investors and potential investors should not
rely on these non-GAAP measures as substitutes for any GAAP measure,
including net income.

View Comments and Join the Discussion!
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at