HealthCo Healthcare & Wellness REIT to acquire Healthscope Hospital Portfolio

HealthCo Healthcare & Wellness REIT (ASX: HCW) has partnered with a new unlisted fund to acquire a 100% stake in 11 private hospitals leased to Healthscope, for a purchase price of AU$1.2 Billion. The acquisition will see HCW take a 100% interest in four hospitals for AU$256 Million in the first tranche, with the unlisted fund acquiring seven hospitals for AU$944 Million in the second and third tranches, with HCW taking a ~50% equity interest in the unlisted fund.

The deal will be funded by an AU$320 Million underwritten equity raising, comprising an AU$89 Million institutional placement and an AU$231 Million pro-rata accelerated non-renounceable entitlement offer. The acquisition, which has attractive lease terms, will significantly improve the income security, scale and quality of HCW’s portfolio, while the unlisted fund will provide funding to unlock AU$1 Billion of accretive development opportunities post-acquisition with a target ROIC of 6-8%. The deal is expected to be accretive to FFO, with FFO guidance for FY23 being upgraded to 7.6cpu.

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