Welltower Partners with Safanad-led Investment Group to Recapitalize HC-One

Rhea-AI Summary

Welltower has partnered with a Safanad-led investment group to recapitalize HC-One, the UK's largest seniors housing operator. This initiative involves a £540 million ($750 million) senior secured loan and a £55 million ($76 million) equity investment, aimed at de-leveraging HC-One's financial structure and enhancing its operational flexibility. The loan will be used to refinance debt and support future investments in care homes. Following this recapitalization, Welltower expects immediate earnings accretion and plans to support HC-One in meeting growing community care needs.

Positive

• Investment of £540 million ($750 million) in a senior secured loan and £55 million ($76 million) in equity enhances HC-One's financial structure.
• Recapitalization expected to immediately boost Welltower's earnings.
• Strengthens HC-One's ability to invest in care homes and improve resident services.

Negative

• None.

TOLEDO, Ohio, April 28, 2021 /PRNewswire/ -- Welltower®Inc (NYSE: WELL) today announced that it has partnered with a Safanad-led investment group to recapitalize HC-One, the largest UK-based seniors housing operating platform. This recapitalization will de-leverage HC-One, extend its debt maturity by five years and inject significant new equity in the company, enabling it to invest in its communities and people, enhance resident experience, and augment its operating and technology platform.

Welltower provided a £540 million ($750 million) senior secured loan backed by HC-One's real estate and other assets in addition to a £55 million ($76 million) equity investment. Welltower also provided a delayed draw capital expenditure facility which will allow HC-One to continue to invest in and re-develop its portfolio of care homes. The £540 million senior loan will be used to refinance existing debt, simplify HC-One's capital structure and significantly increase financial flexibility. The loan has a 5-year term and is fully collateralized by first mortgage rights on HC-One real estate. HC-One owns 282 care homes and leases an additional 45 care homes across the United Kingdom. Welltower also received warrants for its role in providing an efficient solution to meet HC-One's strategic needs.  Importantly, the benefits of the recapitalization enhance HC-One's ability to meet the complex care needs of the communities it serves and to reinforce its commitment to its team members at all levels of the organization. Additionally, the growth capital provided through the recapitalization will enable HC-One to expand its unique and reputed platform through this time of disruption, with potential future capital commitments from Welltower.

"We are proud to partner with a Safanad-led investment group in the recapitalization of HC-One.  Welltower is familiar with the HC-One portfolio through our mezzanine debt investment dating to 2014, and we are delighted to increase our commitment to this uniquely positioned platform," commented Shankh Mitra, Welltower's Chief Executive Officer.  "We are particularly pleased to support HC-One's strategy to invest in its communities and staff who have performed their role admirably throughout the COVID-19 pandemic.  After a challenging period for the UK seniors housing sector, we look forward to participating in a period of recovery and growth in the years ahead."

Welltower's equity and debt investments were funded via existing balance sheet liquidity, with over $2.0 billion of cash and cash equivalents as of March 31, 2021.  The investments are expected to be immediately accretive to Welltower's earnings.

"Safanad is pleased to have partnered with Welltower, a leading global investor in healthcare real estate, on the recapitalization of HC-One," commented Andrew Trickett, Safanad's Head of Investments. "Our strategic partnership with Welltower allowed Safanad to significantly increase our investment in HC-One, which we believe will ensure that HC-One is well positioned to meet its long-term strategic goals."

About Safanad

Safanad (http://www.safanad.com/) is a global principal investment firm that invests in real estate, private equity and public markets.  As principal investors, Safanad preserves and grows wealth through a disciplined industry focused investment approach that builds relationships with exceptional management partners and top industry leaders. With offices in New York, Dubai and London, the firm seeks to identify global investment opportunities poised to deliver consistently attractive returns, where the firm's capital and investment expertise support value creation.

About Welltower

Welltower Inc. (NYSE: WELL), an S&P 500 company headquartered in Toledo, Ohio, is driving the transformation of health care infrastructure. The Company invests with leading seniors housing operators, post-acute providers, and health systems to fund the real estate infrastructure needed to scale innovative care delivery models and improve people's wellness and overall health care experience. Welltower™, a real estate investment trust (REIT), owns interests in properties concentrated in major, high-growth markets in the United States, Canada, and the United Kingdom, consisting of seniors housing and post-acute communities and outpatient medical properties. More information is available at http://welltower.com/.

Forward-Looking Statements

This press release may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. When Welltower uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause Welltower's actual results to differ materially from Welltower's expectations discussed in the forward-looking statements. This may be a result of various factors, including, but not limited to, those factors discussed in Welltower's reports filed from time to time with the SEC. Welltower undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise, or to update the reasons why actual results could differ from those projected in any forward-looking statements.

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SOURCE Welltower Inc.

FAQ

What is the recapitalization of HC-One by Welltower and Safanad?

Welltower partnered with a Safanad-led investment group to provide £540 million in a senior secured loan and £55 million in equity to recapitalize HC-One, enhancing its financial structure.

How will Welltower benefit from the HC-One recapitalization?

Welltower expects the recapitalization to be immediately accretive to its earnings, enhancing the company's financial performance.

What is the purpose of the £540 million loan provided to HC-One?

The £540 million loan is intended to refinance existing debt, simplify HC-One's capital structure, and provide financial flexibility for future investments.

How many care homes does HC-One operate?

HC-One operates 282 care homes and leases an additional 45 care homes across the United Kingdom.