Shares of National Health Investors, Inc. (NHI) gained 2.34% to close at $58.95 on Friday, since the company announced the underwritten common shares offering, on Nov 21. The move is aimed at partly funding the recent buyout of 25 independent living facilities from an affiliate of Holiday Retirement.
In particular, National Health Investors is offering 4.5 million common shares at $57.00 per share and also granted a 30-day option to the underwriters to buy additional shares of up to 0.68 million. The offering is anticipated to close by Nov 27, 2013, upon fulfillment of customary closing conditions.
National Health Investors expects to reap net proceeds of around $245.3 million, after taking into consideration underwriting discounts and commissions and other estimated offering expenses. Notably, if the independent living facilities purchase transaction does not materialize, the amount will be used for other corporate purposes, including other prospective future acquisitions.
A consortium of financial institutions assisted National Health Investors in this offering, with Wells Fargo Securities of Wells Fargo & Company (WFC), BofA Merrill Lynch of Bank of America Corporation (BAC) and BMO Capital Markets of Bank of Montreal (BMO) acting as the joint book-running managers.
As a matter of fact, on Nov 19, National Health Investors disclosed the penning of a deal to acquire 25 independent living facilities from an affiliate of Holiday Retirement. The company will shell out $491 million for this purchase, which is expected to close by this year end.
With a total of 2,841 units, the 25 facilities offer geographic, asset class and operator diversification. They are located across Arkansas, California, Georgia, Idaho, Indiana, Louisiana, New Jersey, Ohio, Oklahoma, Oregon, South Carolina and Washington. The facilities have a median age of 16 years and an average occupancy rate of 89% for the nine months ended Sep 30, 2013. The acquisition is a strategic fit, given the attractive yields and rent escalators.
National Health Investors currently holds a Zacks Rank #3 (Hold).
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