NorthStar To Buy Griffin-American For $4 Bln. - Update

(RTTNews) - NorthStar Realty Finance Corp (NRF) Tuesday agreed to buy Griffin-American Healthcare REIT II Inc in a stock and cash deal valued at $4 billion, including about $600 million of debt.

The deal positions New York-based NorthStar as a key investor in the healthcare real estate sector, with access to medical office buildings and senior housing facilities in the U.S. and the U.K.

As per the terms, Griffin-American stockholders will receive $11.50 per share comprising $7.75 per share in cash and $3.75 per share in NorthStar stock.

The deal is expected to close in the fourth quarter of 2014, and estimated to be neutral to NorthStar Realty's cash available for distribution.

"This acquisition represents a highly desirable portfolio of healthcare real estate assets, which creates the framework for substantial multiple expansion," said NorthStar CEO David Hamamoto.

NorthStar shares gained about 7 percent in morning trade on the New York Stock Exchange.

According to NorthStar, the deal expands its assets and increases owned real estate to about 75 percent of the pro forma company.

Earlier this year, NorthStar acquired senior housing and skilled-nursing facilities for $1.05 billion.

The latest deal comes as an aging U.S. population demands more of medical services and senior housing facilities. In June, healthcare REIT Ventas Inc (VTR) agreed to buy American Realty Capital Healthcare Trust Inc for $2.6 billion.

Griffin-American, based in Irvine, California, was founded in 2009. It had 286 properties in the U.S. and the U.K. at the end of the first quarter.

UBS Investment Bank and CS Capital Advisors are acting as financial advisors to NorthStar Realty.

NorthStar stock is trading at $17.24, up $1.10 or 6.82%, on a volume of 9 million shares.