American Healthcare REIT Completes $4.2B M&A, Eyes IPO Next

American Healthcare REIT late last week announced its completed merger with Griffin-American Healthcare REIT III, creating a combined $4.2 billion in healthcare real estate assets.

Danny Prosky, CEO and president of the newly combined company, said in a statement the real estate investment trust (REIT) is “strategically positioned” to go public. During an investor presentation in June leadership said this is expected to happen by the end of 2022.

“We are pleased to have completed this merger and are excited about the future prospects of American Healthcare REIT,” Prosky said in an Oct. 1 statement. “As a large, diverse and self-managed healthcare REIT, we believe we are strategically positioned to pursue a future listing or IPO on a national stock exchange that would provide liquidity to our existing stockholders and unlock greater growth and value enhancement opportunities as a publicly traded company.”

The company claims this would be the largest-ever public offering of a health care REIT during its June presentation.

American Healthcare Investors (AHI), co-sponsor of both REITs, was also acquired in conjunction with the merger — the three companies are all now American Healthcare REIT Inc.

Each of AHI’s more than 100 employees, including its three founders, are now employees of the combined company.

The merger between Griffin-American Healthcare REIT III (GAHR III) and Griffin-American Healthcare REIT IV (GAHR IV) was initially announced June 24; it’s considered a “tax-free, stock-for-stock” transaction, American Healthcare REITstated.

The newly combined company owns and/or operates 19 million-square-feet of health care real estate in 36 states and the United Kingdom, including 312 buildings across all of its asset types: skilled nursing facilities, senior housing communities, medical office buildings, and other real estate-related investments.

American Healthcare REIT owns 7,278 skilled nursing beds, according to information presented during its June presentation. That’s 26.5% of its asset types.

By comparison, the portfolio includes 35.1% in senior housing, 33.4% in medical office buildings and 3.2% in hospitals.

Skilled nursing operator Trilogy Health Services is GAHR III’s largest investment, the companies said, providing a “powerful investment opportunity” for the expected wave of demand for this type of service.

GAHR III acquired a majority stake in Louisville, Ky.-based Trilogy Health Services as part of a $1.125 billion joint venture in 2015, one of the largest skilled nursing and senior living operators in the United States.

In 2020, Trilogy was the 12th-largest senior living provider in the United States, according to Argentum rankings.

American Healthcare REIT is expected to have about $21 million in operational cost savings annually based on projected fees and expenses the companies would have likely incurred had the deal not been completed.