false00012878650001524607MEDICAL PROPERTIES TRUST INCALAL 0001287865 2019-12-23 2019-12-23 0001287865 mpw:MptOperatingPartnershipLpMember 2019-12-23 2019-12-23
 
 
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): December 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
N/A
(Former name or former address, if changed since last report.)
 
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
Symbol
 
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).
     
Medical Properties Trust, Inc.
 
Emerging growth company  
     
MPT Operating Partnership, L.P.
 
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.
     
Medical Properties Trust, Inc.
 
     
MPT Operating Partnership, L.P.
 
 
 
 
 
 
 
 
 
 
 
 
 

This Current Report on Form
8-K
is filed by Medical Properties Trust, Inc., a Maryland corporation (the “Company”), and MPT Operating Partnership, L.P., a Delaware limited partnership through which the Company conducts substantially all of its operations (the “Operating Partnership”). Through one of its wholly-owned subsidiaries, the Company serves as the sole general partner of the Operating Partnership. Unless otherwise indicated or unless the context requires otherwise, references to “we” and “our” refer to the Company, the Operating Partnership and any other subsidiaries thereof.
Item 1.01.
Entry into a Material Definitive Agreement.
 
 
 
 
 
 
 
 
Acquisition of BMI Portfolio
On December 23, 2019, the Operating Partnership entered into definitive agreements pursuant to which certain of its subsidiaries will acquire a portfolio of 30 acute care hospitals located throughout the United Kingdom currently operated by BMI Healthcare Ltd. (“BMI”) and owned by an affiliate of BMI, for approximately £1.5 billion, or approximately $2.0 billion (the “BMI Acquisition”). In a related transaction, affiliates of Circle Health Ltd. (“Circle”) entered into definitive agreements to acquire BMI and assume operations of its 52 facilities in the United Kingdom. Circle has been one of the Company’s tenants since 2014.
Upon closing of the transactions, we will lease back the hospitals to affiliates of Circle under 30 cross-defaulted leases guaranteed by Circle. The leases will each have an initial fixed term to 2050, with two five-year extension options and annual rent escalators linked to UK consumer price inflation.
The table below sets forth certain details with respect to the hospitals in the BMI portfolio that we are acquiring:
                                 
Hospital
 
City
 
 
Form of
Investment
 
 
Hospital
Type
 
 
Licensed
Beds
 
London Independent
 
 
London
 
 
 
Fee simple
 
 
 
Acute
 
 
 
73
 
Blackheath
 
 
London
 
 
 
Fee simple
 
 
 
Acute
 
 
 
68
 
Alexandra
 
 
Cheadle
 
 
 
Fee simple
 
 
 
Acute
 
 
 
171
 
Ross Hall
 
 
Glasgow
 
 
 
Fee simple
 
 
 
Acute
 
 
 
101
 
Highfield
 
 
Rochdale
 
 
 
Fee simple
 
 
 
Acute
 
 
 
47
 
Beaumont
 
 
Bolton
 
 
 
Fee simple
 
 
 
Acute
 
 
 
34
 
Droitwich
 
 
Droitwich Spa
 
 
 
Long leasehold
 
 
 
Acute
 
 
 
56
 
Priory
 
 
Edgbaston
 
 
 
Fee simple and long leasehold
 
 
 
Acute
 
 
 
118
 
Hampshire Clinic
 
 
Basingstoke
 
 
 
Fee simple
 
 
 
Acute
 
 
 
65
 
Sarum Road
 
 
Winchester
 
 
 
Fee simple
 
 
 
Acute
 
 
 
48
 
Albyn
 
 
Aberdeen
 
 
 
Fee simple
 
 
 
Acute
 
 
 
28
 
Winterbourne
 
 
Dorchester
 
 
 
Long leasehold
 
 
 
Acute
 
 
 
38
 
Hendon
 
 
London
 
 
 
Fee simple
 
 
 
Acute
 
 
 
30
 
Goring Hall
 
 
Worthing
 
 
 
Fee simple
 
 
 
Acute
 
 
 
37
 
Werndale
 
 
Carmarthen
 
 
 
Fee simple
 
 
 
Acute
 
 
 
27
 
Bath Clinic
 
 
Bath
 
 
 
Fee simple
 
 
 
Acute
 
 
 
67
 
Ridgeway
 
 
Swindon
 
 
 
Fee simple
 
 
 
Acute
 
 
 
50
 
Beardwood
 
 
Blackburn
 
 
 
Fee simple
 
 
 
Acute
 
 
 
18
 
Thornbury
 
 
Sheffield
 
 
 
Fee simple
 
 
 
Acute
 
 
 
77
 
Park
 
 
Arnold
 
 
 
Fee simple
 
 
 
Acute
 
 
 
85
 
Clementine Churchill
 
 
Harrow
 
 
 
Fee simple
 
 
 
Acute
 
 
 
141
 
Mount Alvernia
 
 
Guildford
 
 
 
Fee simple
 
 
 
Acute
 
 
 
76
 
Chaucer
 
 
Canterbury
 
 
 
Fee simple
 
 
 
Acute
 
 
 
55
 
Chelsfield Park
 
 
Orpington
 
 
 
Fee simple
 
 
 
Acute
 
 
 
36
 
Shirley Oaks
 
 
Croydon
 
 
 
Fee simple
 
 
 
Acute
 
 
 
42
 
Sloane
 
 
Beckenham
 
 
 
Fee simple
 
 
 
Acute
 
 
 
32
 
Princess Margaret
 
 
Windsor
 
 
 
Fee simple
 
 
 
Acute
 
 
 
78
 
Chiltern
 
 
Great Missenden
 
 
 
Fee simple
 
 
 
Acute
 
 
 
66
 
Saxon Clinic
 
 
Milton Keynes
 
 
 
Fee simple
 
 
 
Acute
 
 
 
37
 
Manor
 
 
Biddenham
 
 
 
Fee simple
 
 
 
Acute
 
 
 
23
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Licensed Beds
 
 
 
 
 
 
 
 
1,824
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Subject to customary closing conditions, the Company expects to consummate the BMI Acquisition in the first quarter of 2020.
The BMI Acquisition was documented pursuant to the terms of a share purchase agreement, dated December 23, 2019, between GHG Holdco 3 Limited, an affiliate of BMI and indirect owner of the properties, as seller, and Medical Properties Trust Limited, our affiliate, as purchaser (the “Share Purchase Agreement”). The Share Purchase Agreement contemplates that five
non-core
properties, with an aggregate purchase price of less than £10.0 million, owned by the seller and not included in the portfolio of properties listed above will be sold to third parties either prior to or following the closing.
The Company intends to finance the BMI Acquisition with cash on hand, including proceeds from recent U.S. dollar equity and sterling-denominated bond offerings and borrowings under an unsecured sterling-denominated term loan facility. We cannot assure you that the BMI Acquisition will be completed on the terms described herein or at all.
Item 7.01.
Regulation FD Disclosure.
 
 
 
 
 
 
 
 
On December 23, 2019, the Company issued a press release announcing the BMI Acquisition described in Item 1.01 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 and exhibits thereto is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise. The information in this Item 7.01, including the exhibit thereto, shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or into any filing or other document pursuant to the Exchange Act, except as otherwise expressly stated in any such filing.
Forward-Looking Statements
This Current Report on Form
8-K
contains certain “forward-looking” statements as defined by Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements can generally be identified by the use of forward-looking words such as “may”, “will”, “would”, “could”, “expect”, “intend”, “plan”, “aim”, “estimate”, “target”, “anticipate”, “believe”, “continue”, “objectives”, “outlook”, “guidance” or other similar words, and include statements regarding the Company’s plans, strategies, objectives, targets, future expansion and development activities and expected financial performance that are not historical facts. 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 closing of the BMI Acquisition and related transactions on the terms contemplated or at all; the ability of the Company’s tenants to meet the terms of their agreements; expected payout ratio; the amount of acquisitions of healthcare real estate, if any; capital markets conditions; the repayment of debt arrangements; statements concerning the additional income to the Company as a result of ownership interests in certain hospital operations and the timing of such income; the payment of future dividends, if any; completion of additional debt or equity 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 real estate investment trust for federal 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; and the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain equity or debt financing secured by our properties or on an unsecured basis, and the factors referenced under the section captioned “Item 1.A Risk Factors” in the Annual Report on Form
10-K
of the Company and the Operating Partnership for the year ended December 31, 2018 and the Quarterly Report on Form
10-Q
of the Company and the Operating Partnership for the quarter ended September 30, 2019, and other risks described in documents subsequently filed by the Company or the Operating Partnership from time to time with the Securities and Exchange Commission.
 
 

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)
 
 
 
 
 
 
 
 
 
 

SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized.
     
MEDICAL PROPERTIES TRUST, INC.
     
By:
 
/s/ R. Steven Hamner
Name:
 
R. Steven Hamner
Title:
 
Executive Vice President and Chief Financial Officer
 
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: December 2
6
, 2019