NHI Announces Pricing of Upsized Public Offering of Common Stock

Rhea-AI Summary

National Health Investors (NYSE:NHI) has announced the pricing of an upsized public offering of 2,400,000 shares of common stock at $71.25 per share. The offering, expected to close on August 16, 2024, includes a 30-day option for underwriters to purchase up to 360,000 additional shares. NHI has entered into forward sale agreements with major financial institutions, allowing for future settlement within approximately 12 months. The company plans to use the net proceeds for working capital, acquisitions, debt repayment, and mortgage investments. This offering is made through an effective shelf registration statement and is being managed by leading investment banks.

Positive

• Upsized public offering of 2,400,000 shares at $71.25 per share, potentially raising significant capital
• 30-day option for underwriters to purchase up to 360,000 additional shares, potentially increasing capital raised
• Flexible settlement terms through forward sale agreements, allowing NHI to optimize timing of share issuance
• Planned use of proceeds for acquisitions, debt repayment, and investments, potentially strengthening financial position

Negative

• Potential dilution of existing shareholders' ownership due to the issuance of new shares
• No immediate receipt of proceeds from the sale of shares, as funds will be received upon settlement of forward agreements

Financial Analyst

NHI's upsized public offering of 2.4 million shares at $71.25 per share is a strategic move to strengthen its financial position. The potential gross proceeds of $171 million (excluding the overallotment option) provide significant liquidity for the company. The use of forward sale agreements is a savvy approach, allowing NHI to lock in the current stock price while deferring share issuance for up to 12 months. This flexibility enables the company to optimize its capital structure and potentially take advantage of market opportunities.

The intended use of proceeds for acquisitions and debt repayment suggests a focus on portfolio growth and balance sheet management. This could lead to improved cash flows and a stronger competitive position in the healthcare REIT sector. However, investors should note the potential dilution effect on earnings per share once the shares are issued.

Market Research Analyst

The successful pricing of NHI's upsized offering at $71.25 per share indicates strong investor demand and confidence in the company's prospects. This price represents a modest 2.3% discount to the previous day's closing price, which is relatively favorable for a secondary offering of this size. The involvement of major financial institutions as underwriters further validates the offering's attractiveness.

The healthcare REIT sector has been experiencing increased interest due to demographic trends and the essential nature of healthcare properties. NHI's ability to raise capital on these terms suggests it's well-positioned to capitalize on market opportunities. However, investors should monitor how effectively management deploys this capital to generate returns that justify the equity issuance.

MURFREESBORO, TN / ACCESSWIRE / August 14, 2024 / National Health Investors, Inc. (NYSE:NHI) (the "Company") announced today the pricing of an underwritten public offering of 2,400,000 shares of its common stock at a public offering price of $71.25 per share, all of which will be offered on a forward basis through the forward purchasers (as defined below) or their respective affiliates in connection with the forward sale agreements described below. The underwriters were also granted a 30-day option to purchase up to an additional 360,000 shares of the Company's common stock from the forward purchasers. The offering is expected to close on August 16, 2024, subject to customary closing conditions.

BofA Securities, J.P. Morgan, Wells Fargo Securities and BMO Capital Markets are acting as joint book-running managers for the offering and as representatives of the underwriters in the offering. Regions Securities LLC and KeyBanc Capital Markets are acting as bookrunners in the offering. Stifel, Huntington Capital Markets and PNFP Capital Markets are acting as co-managers in the offering.

The Company has entered into separate forward sale agreements with each of BofA Securities, J.P. Morgan, Wells Fargo Securities and BMO Capital Markets (or their respective affiliates) (the "forward purchasers") with respect to the shares of common stock covered by the offering. In connection with the forward sale agreements, the forward purchasers or their respective affiliates are expected to borrow and sell to the underwriters all of the shares of common stock that will be delivered in the offering.

Subject to its right to elect cash or net share settlement under certain conditions, the Company intends to deliver, upon full physical settlement of the forward sale agreements on one or more dates specified by the Company occurring no later than approximately twelve months following the date of the prospectus supplement relating to the offering, an aggregate of 2,400,000 shares of common stock to the forward purchasers (or 2,760,000 shares of common stock if the underwriters exercise their option to purchase up to an additional 360,000 shares in full) in exchange for cash proceeds per share equal to the applicable forward sale price, which will initially be the public offering price less the underwriting discount and will be subject to certain adjustments as provided in the forward sale agreements.

The Company will not receive any proceeds from the sale of shares by the forward purchasers or their respective affiliates. The Company expects to use the net proceeds that it receives upon settlement of the forward sale agreements for working capital and for general corporate purposes, including, but not limited to, the funding of acquisitions of additional properties or businesses, the repayment of short-term and long-term debt and investments in mortgages.

The offering is being made pursuant to an effective shelf registration statement and will be made only by means of a preliminary prospectus supplement and a related prospectus relating to such offering and the accompanying base prospectus, a copy of which may be obtained from: BofA Securities, Inc., Attn: Prospectus Department, NCI-022-02-25, 201 North Tryon Street, Charlotte, NC 28255-0001, email dg.prospectus_requests@bofa.com; J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; Wells Fargo Securities, LLC, 90 South 7th Street, 5th Floor, Minneapolis, MN 55402, at 800-645-3751 (option #5) or email a request to WFScustomerservice@wellsfargo.com; BMO Capital Markets Corp., Attn: Equity Syndicate Department, 151 W. 42nd Street, 32nd Floor, New York, NY 10036, email: bmoprospectus@bmo.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About National Health Investors

Incorporated in 1991, National Health Investors, Inc. (NYSE: NHI) is a real estate investment trust specializing in sale, leasebacks, joint-ventures, senior housing operating partnerships, and mortgage and mezzanine financing of need-driven and discretionary senior housing and medical investments. NHI's portfolio consists of independent living, assisted living and memory care communities, entrance-fee retirement communities, skilled nursing facilities, and specialty hospitals.

This press release 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. All statements including, without limitation, words such as "may", "will", "should", "believes", "anticipates", "expects", "intends", "estimates", "plans", "projects", "likely" and other similar expressions are forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements. Such risks and uncertainties include, among other things; the operating success of our tenants and borrowers for collection of our lease and interest income; the risk that our tenants and borrowers may become subject to bankruptcy or insolvency proceedings; risks related to the concentration of a significant percentage of our portfolio to a small number of tenants; risks associated with pandemics, epidemics or outbreaks, such as the COVID-19 pandemic, on our operators' business and results of operations; risks related to governmental regulations and payors, principally Medicare and Medicaid, and the effect that lower reimbursement rates would have on our tenants' and borrowers' business; the risk that the cash flows of our tenants and borrowers would be adversely affected by increased liability claims and liability insurance costs; the risk that we may not be fully indemnified by our lessees and borrowers against future litigation; the success of property development and construction activities, which may fail to achieve the operating results we expect; the risk that the illiquidity of real estate investments could impede our ability to respond to adverse changes in the performance of our properties; risks associated with our investments in unconsolidated entities, including our lack of sole decision-making authority and our reliance on the financial condition of other interests; inflation and increased interest rates; adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults, or non-performance by financial institutions; operational risks with respect to our senior housing operating portfolio structured communities; risks related to our ability to maintain the privacy and security of Company information; risks related to environmental laws and the costs associated with liabilities related to hazardous substances; the risk of damage from catastrophic weather and other natural or man-made disasters and the physical effects of climate change; the success of our future acquisitions and investments; our ability to reinvest cash in real estate investments in a timely manner and on acceptable terms; our ability to retain our management team and other personnel and attract suitable replacements should any such personnel leave; the risk that our assets may be subject to impairment charges; the potential need to incur more debt in the future, which may not be available on terms acceptable to us; our ability to meet covenants related to our indebtedness which impose certain operational limitations and a breach of those covenants could materially adversely affect our financial condition and results of operations; our dependence on revenues derived mainly from fixed rate investments in real estate assets, while a portion of our debt bears interest at variable rates; and our dependence on the ability to continue to qualify for taxation as a real estate investment trust and other risks which are described under the heading "Risk Factors" in Item 1A in our Form 10-K for the year ended December 31, 2023. Many of these factors are beyond the control of the Company and its management. The Company assumes no obligation to update any of the foregoing or any other forward looking statements, except as required by law, and these statements speak only as of the date on which they are made. Investors are urged to carefully review and consider the various disclosures made by NHI in its periodic reports filed with the Securities and Exchange Commission, including the risk factors and other information in the above referenced Form 10-K. Copies of each filing may be obtained from the Company or the SEC.

Contact: Dana Hambly, Vice President, Finance & Investor Relations
Phone: (615) 890-9100

SOURCE: National Health Investors

View the original press release on accesswire.com

FAQ

What is the price per share for NHI's public offering announced on August 14, 2024?

National Health Investors (NHI) has priced its public offering at $71.25 per share.

How many shares is NHI offering in its August 2024 public offering?

NHI is offering 2,400,000 shares of common stock, with an option for underwriters to purchase up to an additional 360,000 shares.

When is the expected closing date for NHI's public offering announced in August 2024?

The offering is expected to close on August 16, 2024, subject to customary closing conditions.

How does NHI plan to use the proceeds from its August 2024 public offering?

NHI plans to use the net proceeds for working capital, general corporate purposes, funding acquisitions, repaying debt, and investing in mortgages.