SABRA HEALTH CARE REIT, INC. (NASDAQ:SBRA) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
Merger Agreement
On May7, 2017, Sabra Health Care REIT, Inc. (Sabra or the
Company) entered into an Agreement and Plan of Merger (the
Merger Agreement) with Care Capital Properties, Inc., a
Delaware corporation (CCP), PR Sub, LLC, a Delaware
limited liability company and wholly owned subsidiary of the
Company (Merger Sub), Care Capital Properties, LP
(CCPLP), a Delaware limited partnership and wholly-owned
subsidiary of CCP, and Sabra Health Care Limited Partnership
(Sabra LP), a Delaware limited partnership and
wholly-owned subsidiary of the Company. to the Merger Agreement,
CCP will be merged with and into Merger Sub (the Merger),
with Merger Sub continuing as the surviving entity in the Merger.
Following the Merger, also to the Merger Agreement, Merger Sub
will be merged with and into the Company (the Subsequent
Merger), with the Company continuing as the surviving entity
in the Subsequent Merger. Simultaneously with the Subsequent
Merger, also to the Merger Agreement, CCPLP will be merged with
and into Sabra LP (the Partnership Merger), with Sabra LP
continuing as the surviving entity in the Partnership Merger.
Upon the terms and subject to the conditions of the Merger
Agreement, at 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 (other than
shares of CCP common stock owned directly by CCP, the Company or
their respective subsidiaries, in each case not held on behalf of
third parties) will be converted into the right to receive 1.123
(the Exchange Ratio) newly issued shares of Company common
stock, par value $0.01 per share (the Merger
Consideration).
In addition, at the effective time of the Merger, subject to the
terms and conditions set forth in the Merger Agreement, (i)each
option to purchase shares of CCP common stock that is outstanding
and unexercised as of immediately prior to the effective time of
the Merger will fully vest, be assumed by the Company and
converted into a stock option award with respect to shares of
Company common stock using the Exchange Ratio, and remain
exercisable in accordance with the terms applicable to the CCP
option award, (ii)each share of CCP restricted stock that is
outstanding immediately prior to the effective time of the Merger
will fully vest and be converted into the right to receive the
Merger Consideration, (iii) each CCP restricted stock unit award
(other than deferred stock units described below) that is
outstanding immediately prior to the effective time of the Merger
will fully vest and be converted into a stock unit award with
respect to shares of Company common stock using the Exchange
Ratio, with any restricted stock unit awards subject to
performance-based vesting terms vesting and becoming 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 ultimately be converted into the Merger
Consideration) and (iv) each CCP deferred stock unit award that
is outstanding immediately prior to the effective time of the
Merger will fully vest (if not already vested), be 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 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.
The parties obligations to consummate the Merger are subject to
certain conditions, including, without limitation, (i)the
adoption of the Merger Agreement by the holders of a majority of
the outstanding shares of CCP common stock entitled to vote at a
special meeting of the CCP stockholders held for that purpose,
(ii)the approval of the issuance of Company common stock in
connection with the Merger by a majority of the votes cast by the
holders of Company common stock at a special meeting of the
Company stockholders held for that purpose, (iii)the shares of
Company common stock to be issued in connection with the Merger
will have been approved for listing on the NASDAQ Global Select
Market, subject to official notice of issuance, (iv)the
effectiveness of the registration statement on Form S-4 to be
filed by the Company for purposes of registering the issuance of
shares of Company common stock issuable in connection with the
Merger, (v)the Company and CCP each having received certain tax
opinions and (vi)the absence of any order or injunction
preventing the consummation of the Merger or any material law
rendering the consummation of the Merger illegal.
The Merger Agreement provides that, during the period from the
date of the Merger Agreement until the effective time of the
Merger, each of the Company and CCP will be subject to certain
restrictions on its ability to solicit alternative acquisition
proposals from third parties, to provide nonpublic information to
third parties and to engage in discussions with third parties
regarding alternative acquisition proposals, subject to customary
exceptions.
The Merger Agreement provides for certain termination rights for
both the Company and CCP, including the right of either party to
terminate the Merger Agreement if the Merger is not consummated
by November7, 2017. Upon termination of the Merger Agreement
under certain specified circumstances, the Company or CCP may be
required to pay the other a termination fee of $38,500,000. In
addition, if the Merger Agreement is terminated because of a
failure by one partys stockholders to approve the transactions,
such party will be required to reimburse the other party for
transaction expenses up to $15,000,000.
In the Merger Agreement, the Company has agreed to take such
actions as are necessary to increase the size of the board of
directors of the Company to eight directors and cause Raymond J.
Lewis, Ronald G. Geary and Jeffrey A. Malehorn, each of whom is
currently a member of the CCP board of directors, to become
members of the board of directors of the Company as of the
effective time of the Merger.
Also, in the Merger Agreement, the Company has agreed to amend
its charter to increase the number of authorized shares of
Company common stock to at least a number sufficient to effect
issuance of Company common stock in the Merger. On May7, 2017,
the board of directors of the Company approved an amendment to
the Companys charter increasing the Companys authorized common
stock from 125million shares to 250million shares. The charter
amendment will not be effective until it is executed by the
Company and filed with the State Department of Assessments and
Taxation of Maryland.
The Company, Merger Sub and CCP have made customary
representations and warranties in the Merger Agreement and agreed
to certain customary covenants, including, among others,
covenants by each party to use commercially reasonable efforts to
conduct its business in the ordinary course of business
consistent with past practice during the period between the
execution of the Merger Agreement and the consummation of the
Merger.
The foregoing description of the Merger Agreement and the
transactions contemplated thereby is subject to, and qualified in
its entirety by, the full text of the Merger Agreement, which is
attached hereto as Exhibit 2.1 and incorporated herein by
reference.
The Merger Agreement has been included to provide investors and
stockholders with information regarding the terms of the Merger.
It is not intended to provide any other factual information about
the Company or CCP. The representations, warranties, covenants
and agreements contained in the Merger Agreement, which were made
only for purposes of that agreement and as of specific dates, may
be subject to limitations agreed upon by the contracting parties
(including being qualified by confidential disclosures made for
the purposes of allocating contractual risk between the parties
to the Merger Agreement instead of establishing these matters as
facts) and may be subject to standards of materiality applicable
to the contracting parties that differ from those applicable to
investors and stockholders. Moreover, information concerning the
subject matter of the representations and warranties may change
after the date of the Merger Agreement, which subsequent
information may or may not be fully reflected in the Company or
CCPs public disclosures. The Merger Agreement should not be read
alone, but should instead be read in
conjunction with the other information regarding the Company that
is or will be contained in, or incorporated by reference into,
the Forms 10-K, Forms 10-Q and Forms 8-K and other
documents that the Company files or has filed with the
SEC.
Commitment
Letter
On May7, 2017, the
Company entered into a commitment letter (the Commitment
Letter) with UBS AG, Stamford Branch and UBS Securities LLC
as agents, and UBS AG, Stamford Branch, as lender (UBS),
to which UBS has committed to provide a $550,000,000 bridge
facility, (the Bridge Facility), subject to satisfaction
of customary closing conditions. The Bridge Facility is available
to (i)repay existing indebtedness of CCP under its existing
credit facilities and (ii)pay certain fees and expenses in
connection therewith. Under the terms of the Commitment Letter
UBS will act as lead arranger and sole bookrunner. The actual
documentation governing the Bridge Facility has not been
finalized, and accordingly, the actual terms may differ from the
description of such terms in the Commitment Letter.
The foregoing
summary of the Commitment Letter is subject to, and qualified in
its entirety by, the full text of the Commitment Letter attached
as Exhibit 10.1 and hereto and incorporated herein by
reference.
| Item5.03. |
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
Additionally, on
May7, 2017, the board of directors of the Company approved an
amendment and restatement of the Companys Amended and Restated
Bylaws (as amended, the Bylaws) to add a new Article XIV,
effectively immediately.
Article XIV
generally provides that, unless the Company consents to another
venue, certain stockholder claims may only be brought in the
Circuit Court for Baltimore City, Maryland or, if that court does
not have jurisdiction, the United States District Court for the
District of Maryland, Baltimore Division.
The foregoing
summary of the amendment to the Bylaws is subject to, and
qualified in its entirety by, the full text of the Bylaws
attached as Exhibit 3.1 hereto and incorporated herein by
reference.
| Item7.01. | Regulation FD Disclosure. |
On May7, 2017, the
Company and CCP issued a joint press release announcing their
entry into the Merger Agreement. The full text of the press
release is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
Additionally, on
May8, 2017, the Company provided supplemental information
regarding the proposed Merger in connection with a presentation
to investors. A copy of the investor presentation is attached
hereto as Exhibit 99.2 and is incorporated herein by
reference.
ADDITIONAL
INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
This communication
does not constitute an offer to sell or the solicitation of an
offer to buy any securities or a solicitation of any vote or
approval. This communication may be deemed to be solicitation
material in respect of the proposed merger of CCP with a wholly
owned subsidiary of Sabra. In connection with the proposed
merger, Sabra intends to file a registration statement on Form
S-4 with the U.S. Securities and Exchange Commission (SEC), which
will include a joint proxy statement/prospectus with respect to
the proposed merger. After the registration statement is declared
effective, Sabra and CCP will each mail the definitive joint
proxy statement/prospectus to their respective
stockholders. The
definitive joint proxy statement/prospectus will contain
important information about the proposed merger and related
matters. STOCKHOLDERS OF SABRA AND CCP ARE URGED TO READ ALL
RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE DEFINITIVE
JOINT PROXY STATEMENT/PROSPECTUS, CAREFULLY AND IN THEIR ENTIRETY
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT SABRA, CCP AND THE MERGER. Stockholders will be
able to obtain copies of the joint proxy statement/prospectus and
other relevant materials (when they become available) and any
other documents filed with the SEC by Sabra and CCP for no charge
at the SECs website at www.sec.gov. Copies of the documents filed
by Sabra with the SEC will be available free of charge on Sabras
website at www.sabrahealth.com, or by directing a written request
to Sabra Health Care REIT, Inc., 18500 Von Karman Avenue, Suite
550, Irvine, CA 92612, Attention: Investor Relations. Copies of
the documents filed by CCP with the SEC will be available free of
charge on CCPs website at www.carecapitalproperties.com, or by
directing a written request to Care Capital Properties, Inc., 191
North Wacker Drive, Suite 1200, Chicago, Illinois 60606,
Attention: Investor Relations.
PARTICIPANTS IN THE
SOLICITATION
Sabra and CCP, and
their respective directors and executive officers and certain
other employees, may be deemed to be participants in the
solicitation of proxies in respect of the transactions
contemplated by the merger agreement. Information concerning the
ownership of Sabra securities by Sabras directors and executive
officers is included in their SEC filings on Forms 3, 4, and 5,
and additional information about Sabras directors and executive
officers is also available in Sabras proxy statement for its 2017
annual meeting of stockholders filed with the SEC on April25,
2017, as well as its Form 10-K filed with the SEC for the year
ended December31, 2016. Information concerning the ownership of
CCP securities by CCPs directors and executive officers is
included in their SEC filings on Forms 3, 4, and 5, and
additional information about CCPs directors and executive
officers is also available in CCPs proxy statement for its 2017
annual meeting of stockholders filed with the SEC on April7,
2017, as well as its Form 10-K filed with the SEC for the year
ended December 31, 2016. Other information regarding persons who
may be deemed participants in the proxy solicitation, including
their respective interests by security holdings or otherwise,
will be set forth in the joint proxy statement/prospectus
relating to the proposed merger when it becomes available and is
filed with the SEC. These documents can be obtained free of
charge from the sources indicated above.
| Item9.01. | Financial Statements and Exhibits. |
(d)
Exhibits.
| 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, Care Capital Properties, Inc. and Care Capital Properties, LP (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). |
|
| 3.1 | Amended and Restated Bylaws, dated as of May7, 2017. | |
| 10.1 |
Commitment Letter, dated as of May7, 2017, by and among Sabra Health Care REIT, Inc, UBS AG, Stamford Branch and UBS Securities, LLC. |
|
| 99.1 | Press Release, issued on May7, 2017. | |
| 99.2 | Investor Presentation, dated May8, 2017. |
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: May7, 2017 |
/s/ Harold W. Andrews, Jr. |
|||||
| Name: | Harold W. Andrews, Jr. | |||||
| Title: |
Executive Vice President, Chief Financial Officer and Secretary |
EXHIBIT
INDEX
|
Exhibit No. |
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, Care Capital Properties, Inc. and Care Capital Properties, LP (the schedules and certain exhibits have been omitted |
About 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. SABRA HEALTH CARE REIT, INC. (NASDAQ:SBRA) Recent Trading Information
SABRA HEALTH CARE REIT, INC. (NASDAQ:SBRA) closed its last trading session up +0.11 at 26.68 with 344,390 shares trading hands.