Assura (AGR) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of 14 fully operational UK private hospitals for £500 million accelerates diversification into the private healthcare sector and supports strategy to be the leading UK healthcare property investor and developer.

• Responds to growing demand for private healthcare due to NHS strain and socio-demographic drivers, underpinning the investment's attractiveness.

• Strengthens relationships with all Tier 1 private providers, enhancing long-term partnership opportunities and providing access to all major operators.

• Adds scale, diversifies portfolio, and cements position as a leading diversified healthcare REIT.

• Supports social impact and sustainability objectives.

Financial terms and conditions

• Headline acquisition price of £500 million, with £100 million in new shares (six-month lock-in), £266 million unsecured/refinanced term loan, and £134 million from cash and revolving credit facility.

• No stamp duty payable due to deal structure.

• Portfolio acquired at a 5.9% initial yield on cost, with a WAULT of 26 years and rent roll of £29.4 million.

• Pro forma property portfolio increases to £3.2 billion; rent roll rises by 20% to £179 million; pro forma LTV at 48%, targeted to fall below 45% within 18-24 months.

• New term loan at 110bps over SONIA, maturing August 2026, with extension options and expected interest rate of ~4%; weighted average cost of debt rises to 2.99%.

Synergies and expected cost savings

• All acquired properties are on fully repairing and insuring leases, resulting in limited incremental overheads (£600–800k per annum).

• Opportunity to restructure and unlock further savings through corporate restructuring.

• EPRA cost ratio expected to fall to around 12%.

• Disposal programme and capital recycling to strengthen balance sheet.

• Opportunities for asset enhancement, including extensions and sustainability upgrades.