SABRA HEALTH CARE REIT, INC. (NASDAQ:SBRA) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
As previously disclosed in the Current Report on Form8-K filed on July31,2017 with the Securities and Exchange Commission (the “SEC”) by Sabra Health Care REIT,Inc., a Maryland corporation (the “Company”), on July28, 2017, Sabra Health Care Limited Partnership, of which the Company is the sole general partner (the “Operating Partnership”), and Sabra Canadian Holdings, LLC, also a wholly owned subsidiary of the Company (together, the “Borrowers”), delivered into escrow, along with the other parties thereto, their respective pages to the form of that certain fourth amended and restated unsecured credit agreement (the “Credit Agreement”) with certain lenders as set forth therein; Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer; Citizens Bank, National Association, Credit Agricole Corporate and Investment Bank and Wells Fargo Bank, N.A., as Co-Syndication Agents, Swing Line Lenders and L/C Issuers; BMO Harris Bank, N.A., The Bank of Tokyo-Mitsubishi UFJ, LTD., Barclays Bank PLC, Compass Bank, Citibank, N.A., J.P. Morgan Chase Bank, N.A., Sumitomo Mitsui Banking Corporation, Suntrust Bank and UBS Securities LLC, as Co-Documentation Agents; Merrill Lynch, Pierce, Fenner& Smith Incorporated, as Joint Lead Arranger and Sole Bookrunner; and Citizens Bank, National Association, Credit Agricole Corporate and Investment Bank and Wells Fargo Securities, LLC, as Joint Lead Arrangers. The Credit Agreement amends and restates the third amended and restated unsecured credit agreement (the “Prior Credit Agreement”) that the Operating Partnership entered into on January14, 2016.
Concurrently with the closing of the Merger (as defined in Item 1.01 below), the Company, the Operating Partnership and the other parties to the Credit Agreement released their respective pages to the Credit Agreement from escrow and the Credit Agreement became effective as of such time.
The foregoing description of the Credit Agreement is qualified in its entirety by reference to the fully signed version of the Credit Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by this reference. The description of the form of the Credit Agreement included in Item 1.01 of the Current Report on Form8-K filed on July31,2017, is incorporated herein by this reference.
| Item 1.01. | Completion of Acquisition or Disposition of Assets. |
As previously disclosed in the Current Report on Form8-K filed on May8,2017, with the SEC by the Company, the Company, Care Capital Properties, Inc., a Delaware corporation (“CCP”), PR Sub, LLC, a Delaware limited liability and wholly owned subsidiary of the Company (“Merger Sub”), the Operating Partnership and Care Capital Properties, LP, a Delaware limited partnership (“CCP OP”), entered into an Agreement and Plan of Merger, dated as of May7,2017 (the “Merger Agreement”).On August17,2017, to the terms and conditions of the Merger Agreement, (i)CCP was merged with and into Merger Sub (the “Merger”), with Merger Sub continuing as the surviving company in the Merger, (ii)immediately following the Merger and simultaneous with the Partnership Merger (as defined below), Merger Sub was merged with and into the Company (the “Subsequent Merger”), with the Company continuing as the surviving corporation in the Subsequent Merger, and (iii)simultaneous with the Subsequent Merger, CCP OP was merged with and into the Operating Partnership (the “Partnership Merger”), with the Operating Partnership continuing as the surviving partnership in the Partnership Merger.
to the Merger Agreement, as of the effective time of the Merger, each share of CCP common stock, par value $0.01 per share, issued and outstanding immediately prior to the effective time of the Merger was converted into the right to receive 1.123 (the “Exchange Ratio”) shares of Company common stock, par value $0.01 per share, plus cash in lieu of any fractional shares (the “Merger Consideration”).
In addition, as of the effective time of the Merger, (i)each option to purchase shares of CCP common stock that was outstanding and unexercised as of immediately prior to the effective time of the Merger became fully vested, was assumed by the Company and converted into a stock option award with respect to shares of Company common stock using the Exchange Ratio and remains exercisable in accordance with the terms applicable to the CCP option award, (ii)each share of CCP restricted stock that was outstanding immediately prior to the effective time of the Merger became fully vested and was converted into the right to receive the Merger Consideration, (iii)each CCP restricted stock unit award (other than deferred stock units described below) that was outstanding immediately prior to the effective time of the Merger became fully vested and was converted into a stock unit award with respect to shares of Company common stock using the Exchange Ratio, while any restricted stock unit award
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subject to performance-based vesting terms became vested and payable at the greater of (1)the target number of units or (2)the number of units earned based on actual performance (and as a result of such vesting, will be converted into the Merger Consideration promptly following the closing of the Merger) and (iv)each CCP deferred stock unit award that was outstanding immediately prior to the effective time of the Merger became fully vested (if not already vested), was assumed by the Company and converted into a deferred stock unit award with respect to shares of Company common stock using the Exchange Ratio, and will be settled by the Company in shares of Company common stock on the same payment date and terms applicable to the CCP deferred stock unit award.
Upon the closing of the Merger, the shares of CCP common stock, which previously traded under the ticker symbol “CCP” on the New York Stock Exchange (the “NYSE”), have ceased trading on, and were delisted from, the NYSE.
The foregoing summary description of the Merger Agreement is qualified in its entirety by reference to the terms of the Merger Agreement, a copy of which was filed as Exhibit2.1 to the Company’s Current Report on Form8-K filed with the SEC on May8, 2017, which is incorporated herein by this reference.
| Item 1.01 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
Concurrently and in connection with the closing of the Merger, the Company borrowed an aggregate of $1.351billion and CAD $125million to the Credit Agreement. The amounts borrowed include $900million for the U.S. dollar term loan with a five-year maturity, $200million for the U.S. dollar term loan with a three-year maturity, CAD $125million for the Canadian dollar term loan with a five-year maturity and $251million under the revolving credit facility.
The disclosure set forth in Item 1.01 above is incorporated in its entirety herein by this reference.
| Item 1.01 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Directors
Effective as of immediately after the effective time of the Merger, the Company’s Board of Directors increased the size of the Company’s Board of Directors from five to eight directors and appointed Raymond J. Lewis, Ronald G. Geary and Jeffrey A. Malehorn as directors of the Company to serve until the Company’s 2018 Annual Meeting of Stockholders and until their respective successors are duly elected and qualified.
Messrs. Lewis, Geary and Malehorn were appointed as directors of the Company, to the terms of the Merger Agreement, which required the Company to take such actions as are necessary to cause three CCP designees to become members of the Company’s Board of Directors immediately after the Effective Time.
As non-employee directors, each of Messrs. Lewis, Geary and Malehorn will receive compensation in the same manner as the Company’s other non-employee directors, as previously disclosed under “Director Compensation—Directors’ Compensation Policy” in the Company’s Proxy Statement for its 2017 Annual Meeting of Stockholders, filed with the SEC on April25, 2017, which description is incorporated herein by this reference.
| Item 1.01 | Regulation FD Disclosure. |
On August17, 2017, the Company issued a press release announcing the consummation of the Merger.A copy of the press release is attached as Exhibit99.1 and is incorporated herein by this reference.
| Item 1.01 | Financial Statements and Exhibits. |
(a) Financial Statements of Businesses Acquired.
The financial statements required by this Item 1.01(a) with respect to the acquired business described in Item 1.01 hereof will be filed by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
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(b) Pro Forma Financial Information.
The pro forma financial information required by this Item 1.01(b) with respect to the acquired business described in Item 1.01 hereof will be filed by amendment to this Current Report on Form 8-K not later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
(d) Exhibits.
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Exhibit Number |
Description |
| 2.1 | Agreement and Plan of Merger, dated as of May7, 2017, by and among Sabra Health Care REIT, Inc., PR Sub, LLC, Sabra Healthcare REIT Limited Partnership, CCP and Care Capital Properties, (incorporated by reference to Exhibit2.1 to the Company’s Current Report on Form8-K filed May8, 2017) (the schedules and certain exhibits have been omitted to Item 601(b)(2) of Regulation S-K; a copy of any omitted schedule or exhibit will be furnished supplementally to the Securities and Exchange Commission upon request) |
| 10.1 | Fourth Amended and Restated Credit Agreement, dated as of August17, 2017, among Sabra Health Care Limited Partnership and Sabra Canadian Holdings, LLC, as Borrowers; Sabra Health Care REIT, Inc., as REIT Guarantor; the other guarantors party thereto; the lenders party thereto; Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer; Citizens Bank, National Association, Credit Agricole Corporate and Investment Bank and Wells Fargo Bank, N.A, as Co-Syndication Agents, Swing Line Lenders and L/C Issuers; BMO Harris Bank N.A., The Bank of Tokyo-Mitsubishi UFJ, LTD., Barclays Bank PLC, Compass Bank, Citibank, N.A., J.P. Morgan Chase Bank, N.A., Sumitomo Mitsui Banking Corporation, Suntrust Bank and UBS Securities LLC, as Co-Documentation Agents; and Merrill Lynch, Pierce, Fenner& Smith Incorporated, as Joint Lead Arranger and Sole Bookrunner; and Citizens Bank, National Association, Credit Agricole Corporate and Investment Bank and Wells Fargo Securities, LLC, as Joint Lead Arrangers |
| 99.1 | Press release, issued on August17, 2017 |
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to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SABRA HEALTH CARE REIT, INC. | |
| Date: August17, 2017 |
/s/ Harold W. Andrews, Jr. |
| Name: | Harold W. Andrews, Jr. |
| Title: | Executive Vice President, Chief Financial Officer and Secretary |
EXHIBIT INDEX
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ExhibitNo. |
Description |
| 2.1 | Agreement and Plan of Merger, dated as of May7, 2017, by and among Sabra Health Care REIT, Inc., PR Sub, LLC, Sabra Health Care Limited Partnership, CCP and Care Capital Properties, LP (incorporated by reference to Exhibit2.1 to the Company’s Current Report on Form8-K filed May8, 2017) (the schedules and certain exhibits have been omitted Sabra Health Care REIT, Inc. ExhibitEX-10.1 2 d445133dex101.htm EX-10.1 EX-10.1 Exhibit 10.1 Published Deal CUSIP Number: 78571QAL1 Published USD Revolver Facility CUSIP Number: 78571QAM9 Published FX Revolver Facility CUSIP Number: 78571QAR8 Published USD Term A-1 Loan CUSIP Number: 78571QAN7 Published CAD Term A-2 Loan CUSIP Number: 78571QAP2 Published USD Term A-3 Loan CUSIP Number: 78571QAQ0 FOURTH AMENDED AND RESTATED CREDIT AGREEMENT Dated as of August 17,…To view the full exhibit click hereAbout SABRA HEALTH CARE REIT, INC. (NASDAQ:SBRA) Sabra Health Care REIT, Inc. is a real estate investment trust. The Company owns and invests in real estate serving the healthcare industry. The Company’s segment is investments in healthcare-related real estate properties. Its primary business consists of acquiring, financing and owning real estate property to be leased to third-party tenants in the healthcare sector. Its investment portfolio includes approximately 180 real estate properties held for investment, including over 100 skilled nursing/transitional care facilities, over 80 senior housing facilities and over two acute care hospitals; approximately 20 investments in loans receivable, including over eight mortgage loans, approximately three construction loans, over two mezzanine loans and approximately three pre-development loans, and over 10 preferred equity investments. Its portfolio includes various healthcare facilities, such as skilled nursing/transitional care facilities; senior housing, and acute care hospital. |
