Healthpeak, Physicians Realty to Merge in $21B All-Stock Deal

Denver-based Healthpeak Properties and Milwaukee-based Physicians Realty Trust have agreed to merge in an all-stock deal of equals that values the healthcare REITS at approximately $21 billion.

Physicians Realty Trust (DOC) holders will get 0.674 shares of newly issued Healthpeak (PEAK) stock for each DOC share held, valuing DOC shares at about $11.07 per share, equal to the stock’s closing price on Friday.

The combined company will be comprised of 52 million square feet of properties, including 40 million square feet of outpatient medical properties concentrated in high-growth markets including Houston, Dallas, Nashville, Phoenix, and Denver.

“This combination joins two leading platforms, bringing them to the next level to create a company uniquely focused on healthcare discovery and delivery, a large and attractive playing field with strong secular growth,” said Scott Brinker, president and CEO of Healthpeak.

The companies expect the merger to produce run-rate synergies of at least $40 million by the end of the first year and up to $60 million by the end of year two. With those cost savings, the transaction is projected to be accretive to run-rate adjusted FFO per share and FFO per share for both PEAK and DOC.

The combined company will be led by Scott Brinker as president and CEO, Peter Scott as CFO, and John Thomas as VC of the Board.

Healthpeak expects to assume Physicians Realty Trust’s senior unsecured notes and term loan and to enter a new $500 million term loan at a rate of SOFR plus 85 basis points.

The transaction is expected to close in the first half of 2024. The combined company will operate under Healthpeak Properties with headquarters in Denver.