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Form 8-K
false00012878650001524607MEDICAL PROPERTIES TRUST INC 0001287865 2019-08-23 2019-08-23 0001287865 mpw:MptOperatingPartnershipLpMember 2019-08-23 2019-08-23
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM
8-K
 
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 23, 2019
 
MEDICAL PROPERTIES TRUST, INC.
MPT OPERATING PARTNERSHIP, L.P.
(Exact Name of Registrant as Specified in Charter)
 
         
Maryland
Delaware
 
001-32559
333-177186
 
20-0191742
20-0242069
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(I. R. S. Employer
Identification No.)
 
 
 
 
 
 
 
 
 
 
 
 
 
1000 Urban Center Drive, Suite 501
Birmingham, AL 35242
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (205)
969-3755
 
 
Check the appropriate box below if the Form
8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
☐
 Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR
240.14a-12)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
☐
Pre-commencement
communications pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
☐
Pre-commencement
communications pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities registered pursuant to Section 12(b) of the Securities Act:
         
Title of each class
 
Trading
Symbols(s)
 
Name of each exchange
on which registered
Common Stock, par value $0.001 per share, of Medical Properties Trust, Inc.
 
MPW
 
The New York Stock Exchange
 
 
 
 
 
 
 
 
 
 
 
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule
12b-2
of the Securities Exchange Act of 1934 (17 CFR §
240.12b-2).
Emerging growth company  
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
☐
     
 
 
 
 
 
 
 
 
 
Item 1.01.
Entry into a Material Definitive Agreement.
 
 
 
 
 
 
The disclosures contained in “Item 2.01 Completion of Acquisition or Disposition of Assets” of this Current Report on Form
8-K
are incorporated into this Item 1.01 by reference.
Item 2.01
Completion of Acquisition or Disposition of Assets.
 
 
 
 
 
 
On August 23, 2019, affiliates of Medical Properties Trust, Inc. (the “Company”) and MPT Operating Partnership, L.P. (the “Operating Partnership”, and together with the Company and its consolidated subsidiaries, “we” or “our”) completed the previously announced $1.55 billion investment in 14 hospitals and two behavioral health facilities operated by Prospect Medical Holdings, Inc. (“Prospect”). Pursuant to the terms of an asset purchase agreement with Prospect, dated July 11, 2019, certain subsidiaries of the Operating Partnership acquired from Prospect all of its interests in the real estate of 11 acute care hospitals and two behavioral health facilities for an aggregate purchase price of approximately $1.4 billion. Such hospitals and facilities were leased back to Prospect under two separate master leases. In addition, (i) a subsidiary of the Operating Partnership made a mortgage loan in the amount of approximately $51.3 million, secured by a first mortgage on an acute care hospital, and (ii) a subsidiary of the Company’s taxable REIT subsidiary made a term loan of approximately $112.9 million, which will mature upon the earlier of three years or the satisfaction of certain conditions. After the maturity of the term loan and upon satisfaction of certain conditions, other subsidiaries of the Operating Partnership will acquire from Prospect all of its interests in the real estate of two additional acute care hospitals, which real estate will be added to one of the master leases. The master leases, mortgage loan, and term loan are cross-defaulted and cross-collateralized. The master leases and mortgage loan have substantially similar terms, with a
15-year
fixed term subject to three extension options, plus annual increases based on inflation.
The table below sets forth pertinent details with respect to the hospitals and behavioral health facilities in the Prospect portfolio:
                                         
Hospital
 
City
   
State
   
Form of
Investment
   
Hospital Type
   
Licensed
Beds
 
Southern CA Hospital at Hollywood
   
Los Angeles
     
California
     
Fee Simple
     
Acute
     
100
 
Southern CA Hospital at Van Nuys
   
Van Nuys
     
California
     
Fee Simple
     
Behavioral
     
57
 
Southern CA Hospital at Culver City
   
Culver City
     
California
     
Fee Simple
     
Acute
     
420
 
Los Angeles Community Hospital at Norwalk
   
Norwalk
     
California
     
Fee Simple
     
Acute
     
50
 
Los Angeles Community Hospital
   
Los Angeles
     
California
     
Fee Simple
     
Acute
     
129
 
Los Angeles Community Hospital at Bellflower
   
Bellflower
     
California
     
Fee Simple
     
Behavioral
     
144
 
Foothill Regional Medical Center
   
Tustin
     
California
     
Mortgage Loan
     
Acute
     
177
 
Manchester Memorial Hospital
   
Manchester
     
Connecticut
     
Fee Simple
     
Acute
     
249
 
Rockville General Hospital
   
Vernon
     
Connecticut
     
Fee Simple
     
Acute
     
102
 
Waterbury Hospital
   
Waterbury
     
Connecticut
     
Fee Simple
     
Acute
     
357
 
Crozer-Chester
Medical Center
    
Upland
     
Pennsylvania
     
Fee Simple
     
Acute
     
300
 
Springfield Hospital
   
Springfield
     
Pennsylvania
     
Fee Simple
     
Acute
     
25
 
Taylor Hospital
   
Ridley Park
     
Pennsylvania
     
Fee Simple
     
Acute
     
105
 
Delaware County Memorial Hospital
   
Drexel Hill
     
Pennsylvania
     
Fee Simple
     
Acute
     
168
 
                                         
Total Licensed Beds*
   
     
     
     
     
2,383
 
                                         
 
 
 
 
 
 
 
 
* Excludes two properties subject to a delayed closing depending upon satisfaction of certain conditions.
 
 
 
 
 
 
The agreements provide for the potential for a future purchase price adjustment of up to an additional $250.0 million based on achievement of certain performance thresholds over a three-year period. Any such adjustment will be added to the lease base upon which the Company will earn a return in accordance with the master leases.
The Company financed the transaction with a combination of unsecured debt and securities issuances.
Item 7.01.
Regulation FD Disclosure.
 
 
 
 
 
 
On August 26, 2019, we issued a press release announcing closing of the transactions described above in Item 2.01 of this Current Report on Form
 8-K.
A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
The information contained in this Item 7.01 is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise. The information in this Item 7.01 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act or into any filing or other document pursuant to the Securities Exchange Act of 1934, as amended, except as otherwise expressly stated in any such filing.
 
 
Item 9.01.
Financial Statements and Exhibits.
 
 
(d) Exhibits.
 
 
         
Exhibit
No.
    
Description
         
 
99.1
    
         
 
104
    
Cover Page Interactive Data File (embedded within the Inline XBRL document).
 
 
 
 
 
 
 
 
 
 
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunder duly authorized.
     
MEDICAL PROPERTIES TRUST, INC.
     
By:
 
/s/ R. Steven Hamner
Name:
 
R. Steven Hamner
Title:
 
Executive Vice President and Chief
Financial Officer
 
 
 
 
 
 
Date: August 29, 2019
     
MPT OPERATING PARTNERSHIP, L.P.
     
By:
 
/s/ R. Steven Hamner
Name:
 
R. Steven Hamner
Title:
 
Executive Vice President and Chief Financial Officer
of the sole member of the general partner of MPT
Operating Partnership, L.P.
 
 
 
 
 
 
Date: August 29, 2019
EX-99.1

Exhibit 99.1

 

LOGO

 

    

Contact: Tim Berryman

    

Director – Investor Relations

    

Medical Properties Trust, Inc.

    

(205) 969-3755

tberryman@medicalpropertiestrust.com

MEDICAL PROPERTIES TRUST COMPLETES INVESTMENTS OF APPROXIMATELY $2.0 BILLION IN RAMSAY AND PROSPECT HOSPITALS

Birmingham, AL – August 26, 2019 – Medical Properties Trust, Inc. (the “Company” or “MPT”) (NYSE: MPW) today announced that it completed on August 16 and August 23, respectively, the acquisitions of the real estate interests of eight UK hospitals operated by Ramsay Health Care and 16 hospitals operated by Prospect Medical Holdings, Inc.

About Medical Properties Trust, Inc.

Medical Properties Trust, Inc. is a self-advised real estate investment trust formed to acquire and develop net-leased hospital facilities. MPT’s financing model facilitates acquisitions and recapitalizations and allows operators of hospitals to unlock the value of their real estate assets to fund facility improvements, technology upgrades and other investments in operations. For more information, please visit the Company’s website at www.medicalpropertiestrust.com.

The statements in this press release that are forward looking are based on current expectations and actual results or future events may differ materially. Words such as “expects,” “believes,” “anticipates,” “intends,” “will,” “should” and variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results of the Company or future events to differ materially from those expressed in or underlying such forward-looking statements, including without limitation: the satisfaction of all conditions to, and the timely closing (if at all) of pending transactions; the amount of acquisitions of healthcare real estate, if any; results from potential sales and joint venture arrangements, if any; capital markets conditions; estimated leverage metrics; the repayment of debt arrangements; statements concerning the additional income to the Company as a result of ownership interests in equity investments and the timing of such income; the payment of future dividends, if any; completion of additional debt arrangements, and additional investments; national and international economic, business, real estate and other market conditions; the competitive environment in which the Company operates; the execution of the Company’s business plan; financing risks; the Company’s ability to maintain its status as a REIT for income tax purposes; acquisition and development risks; potential environmental and other liabilities; and other factors affecting the real estate industry generally or healthcare real estate in particular. For further discussion of the factors that could affect outcomes, please refer to the “Risk factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 and as updated by the Company’s subsequently filed Quarterly Reports on Form 10-Q and other SEC filings. Except as otherwise required by the federal securities laws, the Company undertakes no obligation to update the information in this press release.

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