NorthStar Realty Finance Corp. said on Tuesday it would acquire Griffin-American Healthcare REIT II Inc. for about $3.4 billion in cash and stock. The deal would enlarge NorthStar’s investment in the health care real estate sector. As part of the agreement, NorthStar would pay Griffin-American stockholders $7.75 per share in cash and $3.75 per share in NorthStar stock in exchange for each Griffin-American share. NorthStar would also assume $600 million in Griffin-American debt.
The deal is subject to NorthStar and Griffin-American shareholder approval, as well as customary closing conditions. It is expected to close in the fourth quarter of 2014. Paul, Weiss, Rifkind, Wharton & Garrison provided legal advice to NorthStar while Latham & Watkins, McGuireWoods and Morris, Manning & Martin acted as counsel to Griffin-American. Gibson, Dunn & Crutcher represented North Star’s financial adviser UBS while Skadden, Arps, Slate, Meagher & Flom assisted Column Financial Inc., the real estate financing arm of Credit Suisse AG, in connection with commercial mortgage-backed securities financing for the deal.
NorthStar has been strengthening its foothold in health care real estate recently. In March, it paid $1.1 billion to buy 43 senior housing and 37 skilled-nursing facilities from Formation Capital and Safanad Limited. Griffin American’s U.S. and UK medical office buildings and senior housing facilities will further expand and diversify the company’s assets.
“This acquisition represents a highly desirable portfolio of health-care real estate assets, which creates the framework for substantial multiple expansion and provides NorthStar Realty an exciting opportunity to unlock assetand platform value through future transactions,” David Hamamoto, New York-based NorthStar’s chairman and chief executive officer, said in a statement.
