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Medical Properties Trust to sell 50% interest in 71 German assets for €1.14B

Medical Properties Trust Inc. agreed to sell a 50% interest in a German portfolio of 71 post-acute hospitals under a joint venture it formed with France's Primonial Group for expected proceeds of roughly €1.14 billion.

A fund managed by the asset manager will purchase the stake in a deal valuing the properties at roughly €1.64 billion. The Alabama-based real estate investment trust is expected to record a gain of approximately €500 million upon closing.

Medical Properties will retain its 50% interest in the assets, and an affiliate will remain the manager of the facilities.

Groupe Primonial will fund the acquisition using cash, along with secured financing from a bank syndicate, according to a release.

Medical Properties plans to use the proceeds, including its portion of the secured debt, to repay in full the balances under its revolving credit facility and fund investment opportunities in the U.S. and Europe, as well as for other corporate purposes.

The trust said it is suspending previous guidance on its 2018 net income and funds from operations pending a finalized closing date for the deal and other investment activities.

The deal is scheduled to close in the third quarter, subject to customary conditions, including approval of the German Federal Cartel Office and completion of definitive documentation for the secured financing.