Ventas may use revolver borrowings to help fund ElderTrust acquisition

By Sara Rosenberg

New York, Nov. 20 - Ventas Inc. may draw on its revolver to help fund the $101 million equity portion of the $184 million purchase price of ElderTrust, according to a company news release.

The company also will use cash on ElderTrust's balance sheet and proceeds that Ventas should receive later this year from its previously announced sale of 10 facilities to its primary tenant Kindred Healthcare Inc. to help fund the acquisition.

Under the transaction agreement, Ventas will acquire all of the outstanding common shares of ElderTrust for $12.50 per share.

"We are delighted to announce this merger agreement with ElderTrust, another important step in our strategic diversification plan. The transaction should be accretive to Ventas's 2004 funds from operations, and ElderTrust's assets represent an attractive addition to our portfolio," said Debra A. Cafaro, Ventas chairman, president and chief executive officer, in the release.

"This merger meets our stated goals of acquiring high quality assets in preferred markets that generate sustainable cash flow and that are operated by care providers with good reputations. We are especially pleased that we will have Genesis as an important, new tenant and that we have begun to diversify our investments into assisted and independent living assets."

Successful completion of the merger is subject to satisfaction of certain other conditions, including the completion of the previously announced Genesis spinoff, which is expected to occur in December, and the implementation of agreements in place between Genesis, ElderTrust and other third parties.

Merrill Lynch is acting as Ventas' exclusive financial adviser, and Wachovia Securities is acting as ElderTrust's exclusive financial adviser.

Ventas is a Louisville, Ky., healthcare real estate investment trust.

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