Ventas, Inc. · NYSE:VTR
Ventas — Merger or Acquisition (March 2015)
27 slides from Ventas's merger presentation, March 2015
Slide 1: Investor Presentation – Spin-off of Post-Acute / SNF Portfolio and Planned Acquisition of Ardent
Investor Presentation– Spin-off of Post-Acute / SNF Portfolio and Planned Acquisition of Ardent
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although Ventas believes that the expectations reflected in any forward-lo
Slide 3: Ventas—Significant Strategic Transactions
Ventas—Significant Strategic Transactions > Spin-off most of its post-acute and SNF portfolio Spin-Off of Post – Creates two focused companies with distinct strategies Acute / SNF – Two companies with strong growth Portfolio – Two experienced management teams > ~$1.4 billion investment (net) in U.S.
Slide 4: Compelling Ventas Investment Thesis
Compelling Ventas Investment Thesis Best MOB Platform/Franchise (1) Increased NOI and FFO per share >90% On-Campus or Affiliated expected growth rates >87% NOI from Assets with Investment Grade Systems and HCA Dividend Increase — >10% Projected at Spin Top Quality SHOP Portfolio Best Dividend Payout
Slide 5: Transactions Enhance Ventas Growth Rate and Segment Diversification
Transactions Enhance Ventas Growth Rate and Segment Diversification Ventas (Pre-Ardent & Spin-Off) PF Ventas (Post-Ardent & Spin-Off) International International Loan & Other Seniors Loan & Other Housing Seniors Specialty Hospitals Specialty Hospitals NNN Housing NNN Hospital Asset MOBs NOI % NOI %
Slide 6: Ventas Growing with Leading Tenants and Operators
Ventas Growing with Leading Tenants and Operators Post-Acute Care Seniors Housing Medical Office Hospitals Top 20 Operating Partners in the Industry % Segment NOI From Top 20 >95% ~80% ~70%(1) 100% Ranked Operators % Total VTR NOI (2) 11% 58% 20% 7% (1) (2) Includes only Lillibridge and Pacific Medi
Slide 7: Spin-Off Transaction Overview and Introduction to SpinCo
Spin-Off Transaction Overview and Introduction to SpinCo 7
Slide 8: Spin-Off Transaction Overview
Spin-Off Transaction Overview > Ventas has announced its plan to spin-off most of its post-acute / SNF portfolio to a new REIT > Spin-off distribution intended to qualify as tax-free for U.S. federal income tax purposes Transaction Description > Spin-off expected to be completed in second half of 20
Slide 9: SpinCo Positioned for Success
SpinCo Positioned for Success SpinCo has Strong Growth Profile… …While Benefiting from Strategic Advantages SpinCo positioned as a separate company to focus Dedicated and experienced management team to and grow its business implement and execute growth strategy Creates a company with a strong balanc
Slide 10: SpinCo's Competitive Strengths
SpinCo’s Competitive Strengths > Large and fragmented > Diversified portfolio market and > Rent escalators provide demographics provide internal growth ample growth opportunity > Reimbursement environment is benign > Low leverage balance sheet > Quality care providers who efficiently serve > Strong
Slide 11: SpinCo Financial Highlights
SpinCo Financial Highlights Asset Mix (1) Lease Expiration Schedule (% of NOI) Seniors Limited lease expirations through 2019 Housing NNN Loans / Specialty Other Hospitals 1.8% 2.7% 0.9% 0.7% 0.2% 2015 2016 2017 2018 2019 SNFs Key Financial Metrics Operating Overview (2) 2015 NOI $315 - $320mm > EBI
Slide 12: SpinCo Portfolio Highlights
SpinCo Portfolio Highlights Large National Footprint Well-Advantaged to Capitalize on Favorable Industry Dynamics 355 Properties 44 Operators Operates in 37 States Nursing Home Hospital Senior Housing p:\presentation center\maps\ventas\us map\locations SpinCo is One of Two Large Public SNF-Focused R
Slide 13: SpinCo Management, Board and Timeline
SpinCo Management, Board and Timeline > Independent executive management team dedicated to SpinCo > SpinCo will have ~20 corporate employees > Executive management will consist of current Ventas executives with experience and knowledge of the industry, assets and customers: – CEO: Raymond J. Lewis M
Slide 14: SpinCo Investment Highlights
SpinCo Investment Highlights Strong Balance Sheet, Access to Capital Diversified Portfolio by Operator, Markets Geography 4.5x Net Debt to EBITDA Well-Positioned to Capitalize on External Dividend of $0.53 - $0.55 (1) Growth Opportunities Attractive Dividend Yield Portfolio Primed for Internal Growt
Slide 15: Ardent Acquisition Overview
Ardent Acquisition Overview 15
Slide 16: Ardent Transaction Overview
Ardent Transaction Overview > Ventas to acquire Ardent Health Services (“AHS”) for $1.75 billion > Concurrently, (a) Ventas would separate hospital operations (Ardent) from the real estate; (b) Ardent and Ventas will enter into long-term triple-net leases; and (c) Ventas will acquire a minority part
Slide 17: Acquisition of Ardent Real Estate Assets
Acquisition of Ardent Real Estate Assets Long-Term Stable Cash Flows with Excellent Coverage and Embedded Growth (1) Fee simple ownership (no purchase options) 2.9x initial cash coverage Long-term master leases 2.5% annual rent escalators >7% initial expected lease yield Hillcrest HealthCare System
Slide 18: Ardent Overview
Ardent Overview > Top performing health systems in three key markets > Top 10 For-Profit U.S. Hospital Operator with over 10,000 employees > Highly experienced and well-regarded management team with proven track record > $2 billion revenues > Over 50% private pay revenue (commercial payors) > High-q
Slide 19: Hospital Sector Opportunity
Hospital Sector Opportunity Continued Growth in U.S. Hospital Expenditures Coupled with Increasing Emergency Room Visits Strong Performance in the Hospital Sector(1) Increasing Q4 2014 Same Store Adjusted Admissions Growth U.S. Hospital Expenditures +5.1% MedPac Recommended Rate Increase for FY 2016
Slide 20: Ardent Investment Highlights
Ardent Investment Highlights Strong Alignment with Highly Experienced Strategic Acquisition in New Segment in Management Team Platform Built for Future Growth Successful Track Record of Identifying and Integrating Hospital Acquisitions Unique Consolidation Opportunity with Significant Future Growth
Slide 21: Summary
Summary 21
Slide 22: Taking Ventas to the Next Level of Excellence
Taking Ventas to the Next Level of Excellence Both Strategic Transactions Will Serve to Solidify PF Ventas’s Leading Position Spin-Off of Post-Acute / SNF Portfolio Acquisition of Ardent > Enhanced strategic focus at PF Ventas > Strategic acquisition in attractive and large U.S. Hospitals segment >
Slide 23: Appendix
Appendix 23
Slide 24: SpinCo Process Overview
SpinCo Process Overview Transaction > SpinCo intends to file initial Form 10 information statement with SEC in April 2015 Timing > Target completion in second half of 2015 > Distribution of SpinCo common shares via a special distribution to Ventas shareholders in an expected 1:4 ratio Distribution >
Slide 25: Attractive Industry Fundamentals Supporting SpinCo
Attractive Industry Fundamentals Supporting SpinCo SNF Represents ~$120 billion Market Growing Population Driving Need for SNF Services with ~15% Public Ownership $ in billions MMs Population Age 85+ 21 10.0% 20 Not for Profit 8.0% 15 Owned, 15 Private, for $32, 26% 6.0% 10 Profit Public 10 Owned, 7
Slide 26: Strong Hospital Sector Performance
Strong Hospital Sector Performance Hospital Stocks Have Outperformed the S&P as a Result of Increase in Insured Lives (ACA), Improved U.S. Employment Data and Demographic Trends 300 +173.6% 250 3-Year 200 +105.6% Indexed 150 Stock Price +47.5% Performance 100 50 3/26/2012 12/24/2012 9/24/2013 6/25/2
Slide 27: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation includes forward-looking statements regarding estimated non-GAAP financial measures of initial year NOI and FFO for SpinCo, and certain NOI and FFO metrics for Ventas following the anticipated spin-off, based upon the assets currently expected to be owne