$1.2 Billion Australian Hospital Portfolio Acquisition January 31, 2019
DISCLAIMER This presentation contains forward-looking statements. These statements generally can be identified by the use of words such as “plans”, “expects”, “is expected to,” “does not expect”, “scheduled”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projects”, “believes”, or variations of such words and phrases or statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “might”, “occur”, “be achieved”, or “continue” and similar expressions identify forward-looking statements. Some of the specific forward-looking statements in this presentation, include, but are not limited to, statements with respect to the completion of the proposed acquisition, the financing of the proposed acquisition, the anticipated timing of the closing of the proposed acquisition, the extent to which the acquisition is expected to generate AFFO and be accretive, pro forma NOI, WALE, occupancy and other property metrics. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management as of the date hereof, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The REIT’s estimates, beliefs and assumptions, which may prove to be incorrect, include the various assumptions set forth herein, including, but not limited to, all conditions to closing the acquisition being satisfied or waived, the acquisition portfolio performing as expected, funding being obtained as expected to complete the acquisition and that currency exchange rates remain consistent. When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. A number of factors could cause actual results to differ, possibly materially, from the results discussed in the forward- looking statements, including but not limited to those factors discussed under “Risk Factors”. Certain statements included in this presentation may be considered a “financial outlook” for purposes of applicable Canadian securities laws, and as such, the financial outlook may not be appropriate for purposes other than presentation. All forward-looking statements in this presentation are made as of the date hereof. 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. All forward-looking statements in the presentation are qualified by these cautionary statements. Certain information concerning Healthscope and Brookfield contained in this presentation has been taken from, or is based upon, publicly available documents and records on file with regulatory bodies. Although the REIT has no knowledge that would indicate that any of such information is untrue or incomplete, the REIT was not involved in the preparation of any such publicly available documents and neither the REIT, nor any of their officers or trustees, assumes any responsibility for the accuracy or completeness of such information or the failure by such entities to disclose events which may have occurred or may affect the completeness or accuracy of such information but which are unknown to the REIT. Funds from operations (“FFO”), adjusted funds from operations (“AFFO”), net operating income (“NOI”) and net asset value (“NAV”) are not measures recognized under International Financial Reporting Standards (“IFRS”) and do not have standardized meanings prescribed by IFRS. FFO, AFFO, NOI, and NAV are supplemental measures of a real estate investment trust’s performance and the REIT believes that FFO, AFFO, NOI, and NAV are relevant measures of its ability to earn and distribute cash returns to unitholders. The IFRS measurement most directly comparable to FFO, AFFO and NOI is net income. The IFRS measurement most directly comparable to NAV is net equity. A reconciliation of NAV, NOI, FFO, AFFO and Normalized AFFO to net income is presented in the REIT’s management’s discussion and analysis of financial condition and results of operations of the REIT for the period ended September 30, 2018, as filed on SEDAR. 1
SITUATION UPDATE NWH HAS AGREED On November 12, 2018, Healthscope Limited (“HSO” or “Healthscope”) announced that TO ACQUIRE A Brookfield had been granted access to a period of exclusive due diligence (ending December 21 st ) following receipt of a revised proposal, which was subsequently extended to January 18, PORTFOLIO OF 11 2019 HSO PROPERTIES On January 31, 2019, Healthscope announced that it had entered into a Scheme Implementation ON A LONG TERM, Deed with Brookfield to support the Brookfield led acquisition QUADRUPLE NET, Latest Brookfield proposal waives due diligence conditions and is fully funded SALE LEASEBACK Under the terms of the Implementation Deed, Brookfield is seeking to acquire Healthscope by way BASIS VALUED AT of a scheme of arrangement (“Scheme”) or an off-market takeover offer (“Takeover Offer”) $1.2BN Takeover Offer is subject to a 50.1% minimum acceptance and is conditional on the Scheme being unsuccessful HSO CAPITALIZATION The transaction is expected to close Q2-19 HSO:ASX A$m In conjunction with the HSO M&A transaction, Brookfield has agreed to enter into sale and leaseback arrangements on 22 of HSO’s freehold properties Scheme offer price $2.50 NWH has agreed to acquire 11 of the 22 sale properties on a long term, quadruple net, sale 1,741 Shares outstanding 1 leaseback basis valued at $1.2BN, representing a 5.0% initial cap rate (the “Portfolio”) Market Cap 4,353 The property sales are contingent upon the successful completion of either of Brookfield’s Scheme of Arrangement or Takeover Offer Net debt 1,343 5,696 Enterprise value All dollar values in this presentation are in Canadian dollars. Unless otherwise noted Australian dollar values have been converted into Canadian dollars using an illustrative exchange rate of $1.00CAD = $1.05AUD. 2 Notes: (1) Per 3B disclosure dated November 15, 2018
INVESTMENT HIGHLIGHTS CORE HEALTHCARE INFRASTRUCTURE IN MAJOR MARKETS Transformational 11 property, $1.2BN transaction solidifies the REIT as the leader in Australian healthcare real estate N O R W E S T Highly complimentary to NWH’s existing portfolio Deepens relationship with Australia’s 2nd largest BRISBANE private operator PRI V ATE Excellent risk adjusted returns from long term “absolute quadruple net” lease structure, 2.5% annual fixed rent increases strong 2.2x EBITDAR coverage on new 20 year leases ~$525M pipeline of brownfield developments and capital projects with attractive development spreads of 100 bps Newcastle Private MELBOURNE CLINIC Expected to be immediately accretive to Q3 2018 reported DEEPENS EXISTING RELATIONSHIP annualized AFFOPU ACQUISITION METRICS NOI $1.2 BN REGIONS ASSET MIX 5.0% $60 M DIVERSIFICATION 2 ACQUISITION CAP RATE 1 INITIAL RENT 4% 4% PRICE 15% SA 13% NT Psychiatric QLD 57 1,539 11 Rehabilitation 15% OPERATING BEDS PROPERTIES VIC NSW General 59% 20% THEATRES ACQUIRED Surgical 71% 2.5% 20 100% 100% 100% ANNUAL RENT YEAR WALE OCCUPANCY INDEXATION Hospital Australia 3 3 Notes: (1) Based on purchase price excluding transaction costs (2) Based on base rent at completion
Recommend
More recommend
