Medical Properties Trust to Snap up Five Hospitals from Tenet Healthcare for $900M

Medical Properties Trust (MPW), a self-advised real estate investment trust focused on hospital facilities, has agreed to acquire five general acute care hospitals from Tenet Healthcare (THC) for a consideration of about $900 million. The acquired properties will be leased to Steward Health Care System.

Medical Properties Chairman, President, and CEO, Edward K. Aldag, Jr., said, “We are excited to own these essential community hospitals in areas with positive demographic trends at a very attractive yield.” (See Medical Properties stock chart on TipRanks)

Aldag added, “Furthermore, we have a great deal of confidence in Dr. Ralph de la Torre and the Steward team and believe that their physician-led operating model will further enhance the level of care each facility has long been providing to its local population.”

Along with improving portfolio diversification, the transaction is expected to be immediately accretive to Medical Properties’ bottom line. The company now has 444 facilities and about 47,000 licensed beds in nine countries in its portfolio.

On June 14, Wolfe Research analyst Andrew Rosivach initiated coverage on the stock with a Hold rating and a $23 price target (13.5% upside potential). Rosivach believes Medical Properties Trust faces tough competition from cyclical growth sectors.

Based on 3 Buys and 3 Holds consensus on the Street is a Moderate Buy. The average Medical Properties Trust analyst price target of $24 implies 18.5% upside potential. Shares have gained 13.5% over the past year.

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