Blackstone Group LP agreed to acquire real estate investment trust BioMed Realty Trust Inc., a landlord with properties catering to biotechnology companies, for $23.75 a share. The transaction is valued at about $8 billion including debt.
The world’s largest private-equity investor in real estate will pay about 24 percent more than BioMed’s closing share price on Sept. 22, according to a statement on Thursday from the San Diego-based REIT. The deal, which is supported by all of BioMed’s board of directors, is expected to close in the first quarter of 2016, subject to approval by shareholders.
The offer values BioMed’s equity at $4.8 billion and the company has about $2.9 billion of net debt, according to data compiled by Bloomberg. The company was working with Morgan Stanley to explore a sale, people familiar with the matter said on Sept. 23.
Stock investors are too bearish on U.S. real estate, and the market’s decline will probably lead to more takeovers of publicly traded landlords, Jon Gray, global head of real estate at Blackstone, said Oct. 1. Health-care spending is rising quickly in the U.S., boosting demand for laboratory space that can accommodate pharmaceutical developers and manufacturers.
BioMed “owns an exceptional collection of office buildings catering to life science tenants in gateway markets including Boston-Cambridge, San Francisco, San Diego and Seattle," Nadeem Meghji, co-head of US real estate acquisitions for Blackstone, said in the statement. “We believe in the long-term fundamentals of this sector, particularly in locations with top-tier educational and research institutions.”
Morgan Stanley was lead financial adviser to BioMed, with Raymond James Financial Inc. also providing advice. Latham & Watkins LLP was the legal adviser. Eastdil Secured Group of Wells Fargo & Co., Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. advised Blackstone, while Simpson Thacher & Bartlett LLP provided legal advice.