Ventas, Inc. (NYSE:VTR) announced plans to buy into Ardent Medical Services, Inc. along with its subsidiary health services. Ventas reported that the deal was payoff was worth $1.75 billion.
Ardent is in the list of the top 10 profit hospital companies in the United States. It is privately owned by equity funds which are managed by Anderson, Welsh, Stowe and Carson. The Annual profits generated by Ardent health services are well over $ 2 billion. Half of these earnings are from the private industry.
During the transaction, the two companies reached an agreement for Ardent health services to distribute $75 million of the excess cash to the existing investors of the company.
Ventas already has a strategy for the franchise. The company intends to separate real estate from Ardent health services. The next step involves putting them into one collective name which is Ardent. The management will still remain the same.
The new deal allows Ventas to take ownership of ten reputable hospitals. It will operate them under Texas, Hillcrest HealthCare System as BSA Health System.
The new ownership will include real estate of about 3.2 million square feet. Ventas’ main aim is to create a value chain through opening avenues for change and development. The company also plans to multiply its profits by creating a well-organized critical service provision system.
The new changes are also meant to improve Ventas’ image in the new industry. This will help in opening new doors for Ventas to forge its way into new ventures.
In addition to ownership of the hospital chain, the new venture is expected to bring further development and restructuring of the service provision design and structure. The increased diversification is also expected assist Ardent in increasing the margins of the net operating income.
Venturing into the health industry is a very well calculated strategy for Ventas, Inc. (NYSE:VTR). It will boost Ardent’s goodwill through exceptional service provision.in order to maintain this winning streak, Ardent must continue using a high risk strategy and back it up with an exceptional management team. Management reflects the overall performance on a firm.