TORONTO, Jan. 7, 2015 /CNW/ - NorthWest International
Healthcare Properties Real Estate Investment Trust (TSXV: MOB.UN)
(the "REIT") announced today that it has entered into a
binding agreement with NorthWest Value Partners Inc.
("NWVP") to internalize the external management of the REIT
(the "Internalization") effective January 1, 2015.
As previously disclosed, the REIT will internalize the asset
management, property management and development functions of the
REIT currently carried on by affiliates of NWVP. The REIT will also
acquire from NWVP all of the rights and obligations relating to the
management of Vital Healthcare Property Trust.
In consideration for the Internalization assets transferred to
the REIT, NWVP will be entitled to receive the total amount that
would be paid under the existing external management arrangements
and fees earned by Vital Healthcare Management Limited, as external
manager of Vital Healthcare Property Trust, for the 12 months
ending December 31, 2014, adjusted
for the full year effect of acquisitions and committed capital.
This amount is estimated to be approximately $6.6 million. In connection with the
Internalization, the REIT will be issuing deferred units under its
deferred unit plan to new employees of the REIT (other than
Paul Dalla Lana) in the amount of
approximately $8.1 million.
Accordingly, NWVP will issue to the REIT an offsetting $1.5 million non-interest bearing promissory
note, due on demand. The Internalization will not have a cash
impact on the REIT.
The Internalization is expected to close during the first
quarter of 2015, subject to certain conditions. These conditions
include receipt of all necessary regulatory approvals, including
receipt of the Foreign Investment Review Board in Australia and the approval of the TSX Venture
Exchange.
"We are excited to have achieved this significant strategic
milestone towards the internalization of the REIT's management
team", said Paul Dalla Lana, Chief
Executive Officer and Chairman of the REIT. "The existing team of
the asset manager, as well as the Vital manager, and underlying
platforms, will soon join the REIT consisting of approximately 41
professionals across 5 major regions globally. I believe this
fully-integrated internal management structure will help support
the long-term success of the REIT".
NWVP currently owns an approximate 65% interest in the REIT and
Paul Dalla Lana, Chairman and Chief
Executive Officer of the REIT, is the sole shareholder of NWVP.
Accordingly, the Internalization is a "related party transaction"
for the purposes Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions ("MI
61-101"). A special committee of independent trustees was
established by the REIT for the purposes of considering the
Internalization. The special committee retained independent legal
and financial advisors in connection with the Internalization. The
Internalization is not subject to the formal valuation and minority
approval requirements of MI 61-101 as neither the fair market value
nor the subject matter of the transaction represents more than 25%
of the REIT's market capitalization.
"The REIT has negotiated a fair agreement to internalize its
management that is consistent with the arrangement previously
disclosed in the REIT's press release of April 30, 2014", said Robert Baron, Chairman of the Special Committee
of the REIT. "The special committee believes that a fully
integrated internal management platform best positions the REIT to
execute on its growth strategy going forward."
About NorthWest International Healthcare Properties Real
Estate Investment Trust
The REIT is an unincorporated, open-ended real estate investment
trust established under the laws of the Province of Ontario. The REIT's objectives are to: (i)
provide its unitholders with cash distributions from investments
focused on international healthcare properties, on a tax efficient
basis; (ii) enhance the value of the REIT's assets and maximize
long-term unit value; and (iii) expand the asset base of the
REIT.
Forward Looking Information
This news release contains "forward-looking statements" within
the meaning of applicable securities laws, including the statements
regarding the proposed use of the net proceeds from the Offering.
These forward-looking statements are subject to a number of risks
and uncertainties that could cause actual results or events to
differ materially from current expectations, including the risk
that the Internalization will not be completed on the terms
proposed or that all regulatory approvals will not be obtained. The
statements in this news release are made as of the date of this
release and, except as expressly required by applicable law, the
REIT assumes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise. Although the REIT believes that the
assumptions inherent in the forward-looking statements are
reasonable, forward-looking statements are not guarantees of future
performance and, accordingly, readers are cautioned not to place
undue reliance on such statements due to the inherent uncertainty
therein. A discussion of the risk factors applicable to the REIT is
contained under the heading "Risk Factors" in the REIT's annual
information form dated April 23, 2014
and audited consolidated financial statements and management's
discussion and analysis for the year ended December 31, 2013, copies of which may be
obtained on the SEDAR website at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
SOURCE NorthWest International Healthcare Properties REIT