NorthWest Healthcare Properties Real Estate Investment Trust
TSX VENTURE : MOB.UN

NorthWest Healthcare Properties Real Estate Investment Trust

April 30, 2014 15:28 ET

NorthWest International Healthcare Properties REIT Announces Management Internalization and $20 Million Bought Deal Offering of Trust Units

TORONTO, ONTARIO--(Marketwired - April 30, 2014) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

NorthWest International Healthcare Properties Real Estate Investment Trust (TSX VENTURE:MOB.UN) (the "REIT") announced today that it has entered into an agreement with NorthWest Value Partners Inc. ("NWVP") with respect to the internalization of its external management arrangements (the "Internalization"). The REIT also announced that it has reached an agreement with a syndicate of underwriters to issue 9,756,098 trust units of the REIT (the "Trust Units") on a bought deal basis (the "Offering").

Management Internalization

The Internalization will result in the REIT terminating the asset management, property management and development functions of the REIT currently carried on by affiliates of NWVP. It will also result in the REIT acquiring from NWVP all of the rights and obligations relating to the management of Vital Healthcare Property Trust ("Vital Trust").

In consideration, NWVP will receive a one-time payment equal to the amounts that would be paid under the REIT's existing external management arrangements and the fees earned by Vital Healthcare Management Limited for the 12 months ending December 31, 2014, adjusted for the full year effect of acquisitions and committed capital expenditures. The consideration will be payable in Trust Units valued at the Offering price of $2.05, except for amounts required to pay liabilities arising from the Internalization.

The Internalization is expected to close on or before December 31, 2014, subject to certain conditions including, but not limited to the entering into of a definitive binding implementation agreement and the receipt of all necessary approvals.

NWVP currently owns an approximate 80% interest in the REIT and Paul Dalla Lana, Chairman and Chief Executive Officer of the REIT, is the sole shareholder of NWVP. As a result, a special committee of independent trustees consisting of Robert Baron and David Naylor was established by the REIT for the purposes of considering the Internalization. The special committee retained independent legal and financial advisors in connection with the transaction.

The Offering

In conjunction with the Internalization, the REIT has reached an agreement with a syndicate of underwriters (the "Underwriters") led by National Bank Financial Inc. and GMP Securities L.P., acting as joint bookrunners, and including BMO Capital Markets, Canaccord Genuity Corp., Scotiabank, Dundee Securities Ltd., Manulife Securities Inc., Raymond James Ltd., Desjardins Securities Inc., Laurentian Bank Securities Inc., and All Group Financial Services Inc., to issue 9,756,098 Trust Units on a bought deal basis. The Trust Units will be offered at a price of $2.05 per Trust Unit, for gross proceeds of $20,000,000. The REIT has also granted the Underwriters an over-allotment option exercisable at any time up to the date that is 30 days from the date of closing of the Offering to offer for sale up to an additional 1,463,415 Trust Units, on the same terms and conditions (the "Over-Allotment Option") and representing 15% of the size of the base offering.

The net proceeds from the Offering are expected to be used to fund future acquisitions (including the proposed acquisition of the German MOB Portfolio, as defined and detailed in the REIT's press release dated February 18, 2014), and for general trust and working capital purposes.

The terms of the Offering will be described in a preliminary short form prospectus to be filed with Canadian securities regulators on or about May 6, 2014. The Offering is expected to close on or about May 21, 2014, and is subject to certain conditions including, but not limited to, the receipt of all regulatory approvals including the approval of the TSX Venture Exchange and securities regulatory authorities. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities in any jurisdictions. The Trust Units will not be registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from the registration requirements. 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 the securities in any State in which such offer, solicitation or sale would be unlawful.

Proposed TSX Graduation and Expansion of the REIT's Board

Following completion of the Offering, the REIT intends to initiate the process of graduating to the Toronto Stock Exchange (the "TSX"). Subject to TSX approval, the REIT intends to graduate on or before July 1, 2014. Concurrent with graduation, the REIT would appoint three additional trustees (two independent trustees and one nominee of NWVP), which would result in a total of seven trustees (four independent trustees and three nominees of NWVP).

Reflecting on the Internalization, Offering and proposed TSX graduation, Paul Dalla Lana - Chairman and CEO of the REIT commented:

"We are excited to take the significant structural steps of internalizing our management team and graduating to the TSX. While the external management structure and TSX-V listing have served the REIT well in the past eighteen months during a period of transition and significant growth, I believe that a fully-integrated internal management structure and listing on the TSX is the right approach for the long-term success of the REIT. In conjunction with these changes, we are also pleased to be completing an incremental financing with the support of existing and new syndicate members. We look forward to building on these initiatives as we continue to execute on our leading healthcare real estate strategies in Australia, Brazil, Canada, Germany and New Zealand."

About NorthWest International Healthcare Properties Real Estate Investment Trust

The REIT is an unincorporated, open-ended real estate investment trust established under the laws of the Province of Ontario. The REIT's objectives are to: (i) provide its unitholders with stable and growing cash distributions from investments focused on international healthcare properties, on a tax efficient basis; (ii) enhance the value of the REIT's assets and maximize long-term unit value; and (iii) expand the asset base of the REIT.

Forward-Looking Information

This news release contains "forward-looking statements" within the meaning of applicable securities laws, including statements regarding the proposed internalization of the REIT's management, the Offering, the proposed acquisition of the German MOB Portfolio and the REITs intention to graduate to the TSX. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations, including the risk that the Internalization, TSX graduation, the Offering and the proposed acquisition of the German MOB Portfolio will not be completed on the terms proposed, or at all. The statements in this news release are made as of the date of this release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Although the REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. A discussion of the risk factors applicable to the REIT is contained under the heading "Risk Factors" in the REIT's annual information form dated April 23, 2014 and audited consolidated financial statements and management's discussion and analysis for the year ended December 31, 2013, copies of which may be obtained on the SEDAR website at www.sedar.com.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • NorthWest International Healthcare Properties REIT
    Paul Dalla Lana
    CEO
    (416) 366-8300 ext. 1001

    NorthWest International Healthcare Properties REIT
    Teresa Neto
    CFO
    (416) 366-8300 ext. 1002