UK REIT Primary Health Properties has merged with infrastructure investor MedicX Fund.
The all-share merger between the two primary care companies will see Medicx shareholders entitled to receive 0.77 new PHP shares for each share held.
Existing PHP shareholders will hold 69.4% of the new company and MedicX shareholders will hold 30.6%.
An announcement said: “The boards of PHP and MedicX believe that there is a compelling strategic, operational and financial rationale for the merger.”
It said increased scale and financial resources would enable further investment into its NHS-supporting estate, meet the demand for new facilities and deliver estimated cost savings of £4m pa.
PHP’s property management and advisory service Nexus will continue to work for the company, and some employees from MedicX’s investors Octopus Healthcare and OAIFM will transfer to Nexus.
It is expected that MedicX chairman Helen Mahy will join the PHP board as deputy chairman and senior independent non-executive director and Laure Duhot will join as non-executive director and chairman of the adviser engagement committee.
Nick Wiles and Geraldine Kennell will step down from the PHP board.
Steven Owen, chairman of PHP, said: “The merger represents a major step forward in PHP’s strategy, which significantly extends the scale of our business and asset value. The highly complementary nature of the two portfolios will allow the combined business to continue to maximise shareholder value through delivering synergies across the businesses and accelerate the enlarged group’s role in the modernisation of the primary care estate in the UK and Ireland.”
Mahy added: “The strategic fit of the two businesses is excellent and shareholders in the enlarged group will have the opportunity to participate in further growth and share in the significant benefits of scale and operational efficiencies.
“Financially, the merger offers MedicX shareholders a premium to NAV as well as attractive accretion to earnings and dividends per share. Therefore, the MedicX board unanimously recommends the merger to its shareholders.”
The company has a combined portfolio of 479 properties in the UK and the Republic of Ireland, with a combined value of £2.3bn.
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