BETHESDA, Md., April 26, 2018 /PRNewswire/
-- Quality Care Properties, Inc. (NYSE: QCP) ("QCP")
today announced that it has entered into an agreement with
ProMedica Health System, Inc. ("ProMedica"), under which ProMedica
will assume the rights and obligations of QCP pursuant to the
original plan sponsor agreement between QCP and HCR ManorCare Inc.
("HCR ManorCare") entered into on March 2,
2018. As a result, ProMedica will acquire HCR ManorCare at
the completion of HCR ManorCare's Chapter 11 bankruptcy
process.
Separately, QCP entered into a definitive agreement to be
acquired by Welltower Inc. (NYSE: WELL) ("Welltower") for
$20.75 per share in an all-cash
transaction that would close concurrently with the closing of the
QCP and ProMedica transaction. The per share acquisition price
represents an approximate 64.7% premium to the closing price of QCP
common stock on March 1, 2018, the
last day of trading prior to QCP's announcement that it had entered
into the original plan sponsor agreement to acquire HCR ManorCare,
as well as an approximate 17.3% premium to the 60-day volume
weighted average price ended April 24,
2018. The QCP Board of Directors has unanimously determined
that the transaction is in the best interests of QCP and its
shareholders, and will recommend that QCP shareholders approve the
transaction.
In addition, ProMedica and Welltower announced a strategic joint
venture agreement to facilitate these transactions.
Mark Ordan, QCP's Chief Executive
Officer, said, "We are pleased to reach these agreements with
ProMedica and Welltower, which provide QCP shareholders with
strong, certain and immediate value and position the great team at
HCR ManorCare to continue providing high quality care to patients
and their families. Since our spin 17 months ago, we have
worked through a difficult situation with our principal tenant and
navigated industry headwinds that pressured our EBITDA, while under
a constraining financing umbrella. Our Board carefully evaluated
our standalone prospects and options going forward and determined
that this transaction is the best path forward for all of our
stakeholders in light of QCP's risks and opportunities. Through
these agreements, we have found a unique owner for our skilled
nursing and memory care/assisted living facilities with a
relatively low cost of capital, an enormous and flexible balance
sheet, a large CAPEX commitment to our assets and a vision of
long-term value, beyond what QCP could likely deliver on a
standalone and risk adjusted basis."
Mr. Ordan continued, "Ensuring the continuation of the
highest-quality patient care has always been among our top
priorities. We believe the intended capital infusion by ProMedica
and Welltower will benefit the well-being of many thousands of
patients, residents and employees of HCR ManorCare."
QCP will receive a reverse termination fee of $250 million if ProMedica fails to acquire HCR
ManorCare in the bankruptcy proceeding, and QCP will pay Welltower
a termination fee of $19.8 million
(or $59.5 million, in certain
circumstances) if QCP terminates the agreement to accept a superior
proposal, in each case subject to the provisions of the
agreement.
The ProMedica transaction is subject to approval by the U.S.
Bankruptcy Court overseeing HCR ManorCare's Chapter 11 case and
other customary closing conditions. The Welltower transaction is
subject to approval by QCP shareholders and other customary closing
conditions. Each transaction is also, for all practical purposes,
cross-conditioned on the occurrence of the other.
The transactions are not subject to a financing condition and
are expected to close during the third quarter of 2018.
Advisors
Goldman, Sachs & Co. LLC and Lazard acted
as financial advisors to QCP. Wachtell, Lipton, Rosen & Katz
acted as legal advisor to QCP. Barclays acted as financial advisor
to Welltower. Gibson, Dunn & Crutcher LLP acted as legal
advisor to Welltower. Shumaker, Loop & Kendrick, LLP acted as
legal advisor to ProMedica.
About QCP
Quality Care Properties, Inc. is one of the
nation's largest actively managed real estate companies focused on
post-acute/skilled nursing and memory care/assisted living
properties. QCP's properties are located in 29 states and include
257 post-acute/skilled nursing properties, 61 memory care/assisted
living properties, a surgical hospital and a medical office
building. For more information regarding QCP, visit
www.qcpcorp.com.
Additional Information and Where to Find It
This
communication relates to the proposed merger transaction involving
Quality Care Properties, Inc. (the "Company"). In connection with
the proposed transaction, the Company will file relevant materials
with the U.S. Securities and Exchange Commission (the "SEC"),
including the Company's proxy statement on Schedule 14A (the "Proxy
Statement"). This communication is not a substitute for the Proxy
Statement or any other document that the Company may file with the
SEC or send to its shareholders in connection with the proposed
merger. BEFORE MAKING ANY VOTING DECISION, SHAREHOLDERS OF THE
COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE
SEC, INCLUDING THE PROXY STATEMENT, WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. Investors and security holders will be able to obtain
the documents (when available) free of charge at the SEC's website,
http://www.sec.gov, and the Company's website, www.qcpcorp.com.
Participants in Solicitation
The Company and its
directors and officers may be deemed to be participants in the
solicitation of proxies from the holders of the Company's common
stock in respect of the proposed merger transaction. Information
about the directors and executive officers of the Company is set
forth in the proxy statement for the Company's 2018 annual meeting
of shareholders, which was filed with the SEC on April 6,
2018, and in other documents filed by the Company, including on
behalf of such individuals, with the SEC. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the Proxy Statement and
other relevant materials to be filed with the SEC in respect of the
proposed transaction when they become available.
Safe Harbor Statement
Certain statements contained in
this communication may constitute forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements are indicated by words or phrases such
as "guidance," "believes," "expects," "intends," "forecasts,"
"can," "could," "may," "anticipates," "estimates," "plans,"
"projects," "seeks," "should," "targets," "will," "would,"
"outlook," "continuing," "ongoing," and similar words or phrases
and the negative of such words and phrases. Forward-looking
statements are based on the Company's current plans and
expectations and involve risks and uncertainties which are, in many
instances, beyond the Company's control, and which could cause
actual results to differ materially from those included in or
contemplated or implied by the forward-looking statements. Such
risks and uncertainties include the following: the occurrence of
any event, change or other circumstance that could give rise to the
termination of the contemplated transactions; the failure to obtain
the approval of the Company shareholders of the proposed merger
transaction; or the failure to satisfy any of the other conditions
to the completion of the transactions, including conditions related
to approval by the U.S. Bankruptcy Court overseeing HCR ManorCare's
Chapter 11 case; the effect of the announcement of the transactions
on the ability of the Company to maintain relationships with its
partners, tenants, providers, and others with whom it does
business, or on its operating results and businesses generally;
risks associated with the disruption of management's attention from
ongoing business operations due to the transaction; the ability to
meet expectations regarding the timing and completion of the
transactions; and other risks and uncertainties described in the
Company's reports and filings with the SEC, including the risks and
uncertainties set forth in Item 1A under the heading Risk Factors
in the Company's Annual Report on Form 10-K for the year
ended December 31, 2017 filed with the SEC on March 8,
2018 and other periodic reports the Company files with the SEC,
which are available at www.sec.gov and the Company's website at
www.qcpcorp.com. The Company undertakes no obligation to update
forward-looking statements to reflect developments or information
obtained after the date hereof and disclaims any obligation to do
so other than as may be required by law. Readers are cautioned not
to place undue reliance on these forward-looking statements, which
speak only as of the date hereof.
Contacts
Media
Joele Frank,
Wilkinson Brimmer Katcher
Andrew Brimmer / Aaron Palash
(212) 355-4449
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SOURCE Quality Care Properties, Inc.
