American Realty Capital Healthcare Trust III, Inc. Approves $17.64 NAV, Ceases Distributions
July 19, 2017 | by James Sprow | Blue Vault
The following is from an 8-K filed by the nontraded REIT on July 19, 2017:
On July 18, 2017, the independent directors of the Board, who comprise a majority of the Board, with Edward M. Weil, Jr. abstaining, unanimously approved an estimated per-share net asset value of the Company’s common stock as of July 18, 2017 equal to $17.64 (“Estimated Per-Share NAV”) based on 6,959,059 shares of common stock outstanding on a fully diluted basis as of July 18, 2017 (giving effect to the issuance of 2,666 aggregate total restricted shares of the Company’s common stock (the “Restricted Shares”) required under the Company’s employee and director incentive restricted share plan to be automatically granted to each of the Company’s independent directors in connection with the Annual Meeting). This is the first time that the Board has determined an estimated per-share net asset value of the Company’s common stock. The Company anticipates publishing an update to the Estimated Per-Share NAV by July 18, 2018 or earlier, at the discretion of the Board, in connection with material changes including, among others, material liquidating distributions paid pursuant to the Plan of Liquidation.
On June 19, 2017, American Realty Capital Healthcare Trust III, Inc. (the “Company”) entered into a purchase agreement (the “Purchase Agreement”) with Healthcare Trust, Inc. (“HTI”) on June 16, 2017. Pursuant to the Purchase Agreement, HTI has agreed to purchase membership interests in the Company’s subsidiaries that collectively own all 19 properties owned by the Company and comprise substantially all of the Company’s assets (together with the other transactions contemplated by the Purchase Agreement, the “Asset Sale”) for a purchase price of $120.0 million (the “Purchase Price”). The Purchase Price will be payable on the date the Asset Sale is consummated (the “Closing Date”), subject to closing adjustments for customary prorations and reduced for debt assumption or repayment, all as provided in the Purchase Agreement. The only indebtedness being assumed or repaid is the loan secured by the Company’s Philip Center property (the “Philip Center Loan”), which had an outstanding principal balance of approximately $4.9 million as of July 17, 2017.
Estimated Per-Share NAV
In preparing the Liquidation Analysis, the Advisor estimated a range of net liquidation proceeds to be available for distribution to the Company’s stockholders pursuant to the Plan of Liquidation equal to $17.49 to $17.64. The Liquidation Analysis reflects, among other things, the Advisor’s best estimate of:
- the prorations that would be payable to HTI pursuant to the Purchase Agreement;
- the costs and expenses of consummating the Asset Sale and implementing the Plan of Liquidation; and
- the Company’s assets and liabilities on the Closing Date.
- the Closing Date occurred on either (A) September 29, 2017 (the high end of the range), or (B) August 31, 2017 (the low end of the range);
- the final liquidating distribution will occur before there is any need to transfer the Company’s assets to a liquidating trust on either (A) the 14-month anniversary of the Closing Date, which is the earliest date the Company is permitted to make its final liquidating distribution to stockholders under the Plan of Liquidation (the high end of the range), or (B) the two-year anniversary of the Closing Date, which is the latest date the Company is permitted to make its final liquidating distribution to stockholders under the Plan of Liquidation (the low end of the range);
- all $6.0 million of the Purchase Price payable into an escrow account for the benefit of the Company on the Closing Date reserved for pending or unsatisfied indemnification claims of HTI made pursuant to the Purchase Agreement will be released in installments thereafter over a period of 14 months following the Closing Date;
- the Company will cease declaring and paying regular distributions to its stockholders following the distributions to stockholders of record with respect to each day during the month of July 2017 scheduled to be paid on or before August 5, 2017; and
- the Restricted Shares will be issued to the Company’s independent directors in connection with the Annual Meeting.
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