Care Property Invest Acquires 9 Care Homes and launches 55.5m rights issue

Care property announced the acquisition of 9 care homes (8 in Flanders, 1 in Wallonia) for €142.6m with €8.2m annual rental income (5.75% yield). At the same time, it launches a rights issue of €55.5m at €10.5 per share and funds €87.1m by debt (existing and new). The rights issue will be followed by a private placement of the remaining shares with a number of “backstoppers”, who have irrevocably committed to subscribe to all remaining rights (no rump placement). The seller is Korian Belgium, part of Clariane. The exposure to Korian increases from 8% to 17%, but CPI intends to reduce this level over time. The company also believes this deal to become EPS accretive over the mid-term. CPI believes this transaction creates operational scale (=10%), improves asset quality and enhances share liquidity. We suspend our rating as KBCS acts as Joint Global Coordinator.