High Quality Diversified Portfolio of 774 Service-Oriented Retail Net
Enhances HPT’s Cash Flow Stability and Overall Property Level Rent
Expected to Be Accretive to Annualized Normalized FFO per Share in
Conference Call Scheduled for 10:00 a.m. ET Today
NEWTON, Mass.–(BUSINESS WIRE)–Hospitality Properties Trust (Nasdaq:HPT) today announced it entered
into a definitive agreement to acquire a net lease portfolio from Spirit
MTA REIT (NYSE:SMTA) for $2.4 billion in cash, excluding transaction
costs. The portfolio consists of 774 service-oriented retail
properties net leased to tenants in 22 different industries. The
portfolio has a weighted average remaining lease term of 8.6 years, a
weighted average property level rent coverage of 2.68x and annual cash
rent of $172 million as of March 31, 2019. This acquisition excludes
SMTA’s assets leased to certain bankrupt tenants.(1) HPT
expects this transaction to be accretive to annualized Normalized Funds
From Operations, or FFO, per share in 2020.
John Murray, President and Chief Executive Officer of HPT, made the
“We believe that the acquisition of this high-quality, net lease
portfolio creates a stronger HPT. The combination of this diversified
portfolio with our unique lodging structure and net lease travel
centers, yields a REIT with greater scale, a more secure financial
profile, and greater diversity in tenant base, property type and
We expect this transaction to benefit our shareholders and expect to
maintain our investment grade ratings.”
Certain highlights of the portfolio include:
774 net lease properties with approximately 12 million rentable square
- Geographically diverse portfolio across 43 states.
- 98% occupied with a weighted average lease term of 8.6 years.
Annual cash rents of $172 million as of March 31, 2019 and weighted
average rent coverage of 2.68x.
Leases comprising 81% of the portfolio have contractual rent increases
and 52% of portfolio rents are from master leases with cross default
Tenants that span 22 different industries and 164 brands that include
quick service and casual dining restaurants, movie theaters, health
and fitness, specialty retail, automotive parts and services, and
other service-oriented and necessity-based industries.
Manageable near-term lease expirations averaging 4% of contractual
rents per year over the next six years.
Certain expected benefits of the transaction include:
- Expected to be accretive to shareholders.
Strengthens HPT’s property level rent coverage – HPT expects
the acquisition will result in stronger property level rent coverage
for its consolidated portfolio. On a pro forma basis, coverage for the
consolidated portfolio for the twelve-month period ending March 31,
2019 would have increased from 1.21x to approximately 1.46x.
Provides greater scale – The number of HPT properties will
increase from 506 properties to 1,280 properties, and HPT’s gross
assets will increase from $10.2 billion to $12.6 billion, before
expected asset sales.
Diversifies HPT’s tenant concentration – HPT will have a more
diverse and resilient portfolio with the mix of net lease income
increasing from 31% to 43%.
Limited capital expenditure requirements -Tenants under the
leases bear the cost of maintaining the portfolio.
Mr. Murray commented further,
“Since HPT’s inception, its hotel agreements have functioned like triple
net leases due to their strong credit support, subordinated base
management fees and all-or-none renewal options. HPT’s 179 travel
centers are leased under long-term triple net leases and contain over
500 quick service restaurants and 179 casual dining restaurants, truck
repair businesses, stores and large gas stations. Beyond the improved
coverage, diversity, scale, and capital expenditure benefits, which
today’s announced acquisition is expected to create, the transaction
also provides an additional avenue for HPT’s growth. In the future, we
expect to invest in additional service and necessity-based retail
properties on a triple net basis, preferably in portfolios, in addition
to our continued focus on hotels and travel centers.”
Deal Structure, Approvals and Timing
To finance the
transaction, HPT has secured commitments from lenders for an up to $2.0
billion unsecured term loan facility. HPT may use the proceeds from this
term loan facility, borrowings under its existing revolving credit
facility, proceeds from the sale of certain assets and/or proceeds from
the issuance of new unsecured notes to finance the transaction. In
addition to the $2.4 billion purchase price, HPT has agreed to pay the
prepayment penalties to extinguish the existing mortgage debt on the
portfolio, which are estimated to be approximately $72 million. HPT
intends to sell approximately $500 million of the acquired assets and
approximately $300 million of hotel and other assets following the
closing of the acquisition in order to reduce its debt levels to
approximately 6.0 times Adjusted EBITDA for real estate, or Adjusted
Based on estimated GAAP net operating income and pending completion of
HPT’s accounting analysis, HPT believes the acquisition capitalization
rate will be approximately 7.2%. HPT’s accretion estimate for 2020
assumes that debt incurred with this transaction is refinanced with
longer term debt financing at current market rates and is after expected
HPT does not plan to issue common shares in connection with this
The purchase price is subject to certain adjustments. The transaction is
subject to approval by SMTA shareholders and other customary conditions
and is expected to close in the third quarter of 2019.
BofA Merrill Lynch is acting as exclusive financial
advisor and Hunton Andrews Kurth LLP is acting as legal advisor to HPT
in connection with this transaction. Joint Lead Arrangers for the
unsecured term loan are BofA Securities, Inc., Citigroup, Morgan Stanley
Senior Funding, Inc., RBC Capital Markets, and Wells Fargo Securities,
On Monday, June 3, 2019, at 10:00 a.m.
Eastern time, HPT will host a conference call to discuss the
acquisition. Following management’s remarks, there will be a question
and answer period. HPT will also provide a presentation in advance of
the conference call regarding the transaction that will be available at
HPT’s website at www.hptreit.com
and as an exhibit to a Current Report on a Form 8-K furnished with the
Securities and Exchange Commission, or SEC.
The conference call telephone number is 877-329-3720. Participants
calling from outside the United States and Canada should dial
412-317-5434. No pass code is necessary to access the call from either
number. Participants should dial in about 15 minutes prior to the
scheduled start of the call. A replay of the conference call will be
available for about one week after the call. To hear the replay, dial
412-317-0088. The replay pass code is 10132155.
A live audio webcast of the conference call will also be available in a
listen-only mode on HPT’s website. To access the webcast, participants
should visit HPT’s website about five minutes before the call. The
archived webcast will be available for replay on HPT’s website for about
one week after the call. The transcription, recording, or
retransmission in any way of HPT’s conference call is strictly
prohibited without the prior written consent of HPT. HPT’s website
is not incorporated as part of this press release.
Hospitality Properties Trust is a real estate investment trust, or REIT,
which owns a diverse portfolio of hotels and travel centers located in
45 states, Washington, DC, Puerto Rico and Canada. HPT’s properties are
operated under long term management or lease agreements. HPT is managed
by the operating subsidiary of The RMR Group Inc. (Nasdaq:RMR), an
alternative asset management company that is headquartered in Newton,
WARNING CONCERNING FORWARD-LOOKING STATEMENTS
This press release contains statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 and other securities laws. Also, whenever we use
words such as “believe”, “expect”, “anticipate”, “intend”, “plan”,
“estimate”, “will”, “may” and negatives or derivatives of these or
similar expressions, HPT is making forward-looking statements. These
forward-looking statements are based upon HPT’s present intent, beliefs
or expectations, but forward-looking statements are not guaranteed to
occur and may not occur. Actual results may differ materially from those
contained in or implied by HPT’s forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors, some of which are beyond HPT’s control.
HPT has agreed to buy a service-oriented retail net lease portfolio
from SMTA for $2.4 billion, and expects the transaction to close in
the third quarter of 2019. This transaction is subject to approval by
SMTA’s shareholders and other closing conditions. As a result, this
transaction may not occur, may be delayed or the terms may change.
As a result of the transaction announced today, HPT expects to realize
certain benefits, including less tenant concentration, more
resiliency, stronger rent coverage, greater scale, and limited capital
expenditure requirements associated with the SMTA portfolio. However,
these expected benefits depend on many factors that are beyond HPT’s
control and may not occur.
HPT expects to remain investment grade rated; however, remaining
investment grade rated depends on many factors, including reducing
HPT’s leverage over time, which may not occur. HPT’s investment grade
rating may change, or HPT may lose its investment grade rating.
As a result of the transaction, HPT expects that future cash flows and
property level rent coverage will increase and that the transaction
will benefit HPT’s shareholders. However, future cash flows and
property level rent coverage will depend on future operating and
portfolio results, which may decline and expected benefits of the
transaction may not be realized.
HPT expects to refinance the term loan it plans to obtain in
connection with this transaction with a combination of longer-term
senior notes, bank debt, and the sale of assets following closing of
this transaction. HPT may not be able to raise debt at attractive
prices, sell the expected amount of assets, or raise sufficient funds
from selling such assets, and HPT’s leverage may be further increased
and interest costs may be higher than expected.
HPT estimates the prepayment penalties to extinguish SMTA’s mortgage
debt to be $72 million. This is an estimate based on interest rate
assumptions and timing of closing which could increase or decrease the
prepayment penalty amount.
HPT estimates this transaction will be accretive to HPT’s Normalized
FFO per share in 2020 on an annualized basis assuming that debt
incurred with this transaction is refinanced with longer term debt at
current market rates and after expected asset sales. For many reasons,
including, but not limited to, HPT’s ability to finance the
transaction on attractive terms, the performance of the portfolio, and
the impact of asset sales, this transaction may not be accretive to
Normalized FFO per share at expected levels or at all.
HPT does not plan to issue common shares in connection with this
transaction. However, circumstances beyond HPT’s control may change
and HPT may issue common shares in connection with this transaction.
The information contained in HPT’s filings with the SEC, including under
the caption “Risk Factors” in HPT’s periodic reports, or incorporated
therein, identifies other important factors that could cause differences
from HPT’s forward-looking statements.
HPT’s filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon forward-looking statements.
Except as required by law, HPT does not intend to update or change any
forward-looking statements as a result of new information, future events
Excludes approximately 100 assets owned by SMTA primarily leased to
Shopko Stores Inc. as of December 31, 2018.
A Maryland Real Estate Investment Trust with transferable shares of
beneficial interest listed on the Nasdaq.
Trustee or officer is personally liable for any act or obligation of the
Katie Strohacker, Senior Director, Investor Relations
Valens expands Exclusive Licence Agreement to Bring Leading Cannabis-Infusion Technology to New International Markets
Valens GroWorks Corp. (TSXV: VGW) (OTCQX: VGWCF) (the “Company” or “Valens“), a cannabinoid-based product company with industry leading extraction, next generation cannabinoid delivery formats and an ISO 17025 accredited analytical lab, is pleased to announce that it has entered an amended manufacturing and sales licence agreement with SōRSE Technology Corporation (“SōRSE“) which grants Valens an exclusive licence for Canada, Europe, Australia and Mexico to use the proprietary SōRSE emulsion technology (“the Technology“) to produce, market, package, sell and distribute cannabis-infused products (the “Agreement“).
“This Agreement shows Valens’ commitment to invest and broaden its IP portfolio and enable its customers to bring differentiated, next generation products to market,” said Jeff Fallows, President of Valens. “As we move into “Cannabis 2.0” in Canada, we believe the products that offer consistent, high quality and predictable user experiences, like those we are able to create with SōRSE, will capture the lion’s share of attention and be the hallmark for brand development in a strict regulatory environment. With this expanded agreement in place, we have extended this opportunity for our existing customers to key international markets and at the same time established a platform for international consumer brands to add high quality, cannabis infused products to their portfolios.”
The SōRSE Emulsion Technology
The SōRSE emulsion technology transforms cannabis oil into water-soluble forms for use in beverages, edibles, topicals and other consumer products without the burden of cannabis taste, colour or smell. The Technology allows these cannabis infused products to maintain potency when heated, chilled or frozen and provides a number of other key advantages as well, including: (1) a faster observed onset time compared to other infused beverages and edibles, (2) a significant reduction of offset time, (3) an ability to use lower doses of cannabinoids due to the enhanced bioavailability provided by the Technology, and (4) increased consistency and stability with some product formulations achieving more than one-year shelf stability with no evidence of separation.
“We are proud to expand our partnership with Valens and leverage their near-term access to various global markets,” says Howard Lee, CEO of SōRSE. “Over the last year, our team of more than 40 plus professionals has continued to actively focus on creating and developing innovative, desirable products and formats of consumption for cannabis consumers. As emulsion technology becomes more popular through new delivery methods such as ingestion, transdermal, topical and more, it is imperative that quality and safety in consumption leads all innovation in this sector. This is a shared value and mandate that our teams at SōRSE and Valens both prioritize. We look forward to continuing this working relationship with Valens and introducing our award-winning emulsion technology to the global markets.”
The Agreement grants Valens an exclusive licence to use the Technology in Canada, Europe, Australia and Mexico (except in respect of medical applications requiring clinical trials) during the initial 5-year term, subject to certain performance milestones. This increases the addressable market from 37 million in the current Canada only agreement to 700 million people in the new Agreement, an increase of almost 20x. Furthermore, the Agreement provides a framework for Valens to obtain rights to establish non-exclusive agreements to sell cannabis-infused products using the Technology in the U.S. market and other markets, globally.
Bolstering “Cannabis 2.0” Platform
With the expanded exclusivity, Valens and its white label clients are positioned to not only succeed in the Canadian market, but also in the rapidly emerging legal cannabis and hemp-derived CBD markets in Europe, Australia, Mexico and beyond. The Agreement adds to the Company’s leading white label product offerings across numerous “Cannabis 2.0” categories such as beverages, edibles, transdermal products and more, enabling Valens to better serve its current and future partners.
“We have seen incredible interest from our current and potential clients regarding the SōRSE emulsion technology and we are thrilled to finalize the expanded licence agreement with SōRSE,” said Tyler Robson, CEO of Valens. “We expect the expanded exclusive territory will provide our clients with improved visibility and greater opportunity as they look to build global businesses around cannabis-infused products over the long term.
This is an exciting time in the evolution of ingestible cannabis products such as beverages and edibles. Historically, ingestible products have been lacking the necessary technology to provide a consistent, predictable experience, ultimately giving little reason to consume in this manner. At Valens, we expect that properly formulated, extract-based cannabis products, and infused beverages in particular, could disrupt many established beverage categories such as soft drinks, sports drinks, value-added water and alcohol, the latter of which has a monthly spend per capita that is roughly 16 times higher compared to legal cannabis spend in Canada. We believe the ability to plan an occasion and predict the outcome of use will be a game changer in the market and be the catalyst to bring about the full market potential of cannabis infused beverages and edibles, globally.”
Future White Label Services
The Agreement furthers the existing relationship between Valens and SōRSE and enables Valens to produce and sell SōRSE’s portfolio of branded products in Canada and the other exclusive markets at the option of the Company. These branded products include Happy Apple, a cannabis-infused sparkling cider and Major, a cannabis-infused fruit drink, both recognized as top selling cannabis beverages in the State of Washington, Pearl20, a cannabis-infused food and beverage mixer, and the Utopia line of cannabis-infused sparkling water, among others.
The consideration at closing for the exclusivity in the expanded geography was US$10 million, comprised of US$6 million in cash and US$4 million to be issued in common shares of the Company (the “Common Shares“). The Agreement carries an initial 5-year exclusive term with a 2-year renewal of the exclusivity, subject to certain performance milestones related to operational and financial achievements (the “Milestones“). As part of the Agreement, Valens will transfer to SōRSE royalty payments calculated as a percentage of sales (the “Royalty Payments“) and the Royalty Payments will be subject to an annual minimum of $2 million over the 5-year term. The Agreement also provides for a continuation of the Agreement on a non-exclusive basis after the 2-year renewal, subject to annual minimum royalty payments.
All Common Shares pursuant to the Agreement were issued at an indicative price of CDN$3.0471, being the volume-weighted average price of the Common Shares on the TSX Venture Exchange (“TSXV“) for the ten (10) trading days ending December 9, 2019. The Agreement remains subject to approval from the TSXV. All Common Shares issued in connection with the Agreement will be subject to a restricted period of four months and one day. There are no finders’ fees payable by the Company in connection with the Agreement.
SOURCE Valens GroWorks Corp.
Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Energy Transfer LP, Grubhub, Aurora Cannabis, and The RealReal and Encourages Investors to Contact the Firm
Bragar Eagel & Squire, P.C., a nationally recognized shareholder law firm, reminds investors that class action lawsuits have been commenced on behalf of stockholders of Energy Transfer LP (NYSE: ET), Grubhub, Inc. (NYSE: GRUB), Aurora Cannabis, Inc. (NYSE: ACB), and The RealReal, Inc. (NASDAQ: REAL). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Energy Transfer LP (NYSE: ET)
Class Period: February 25, 2017 to November 11, 2019
Lead Plaintiff Deadline: January 20, 2020
On November 12, 2019, the Associated Press reported that Energy Transfer’s Mariner East pipeline project was under investigation by the Federal Bureau of Investigation (“FBI”). Citing interviews with current and former state employees, the Associated Press reported that the FBI’s investigation “involves the permitting of the pipeline, whether [Pennsylvania Governor Tom] Wolf and his administration forced environmental protection staff to approve construction permits and whether Wolf or his administration received anything in return.”
On this news, Energy Transfer’s stock price fell $0.81 per share, or 6.77%, over the following two trading sessions, closing at $11.16 per share on November 13, 2019.
The complaint, filed on November 20, 2019, alleges that throughout the Class Period, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) Energy Transfer’s permits to conduct the Mariner East pipeline project in Pennsylvania were secured via bribery and/or other improper conduct; (ii) the foregoing misconduct increased the risk that the Company and/or certain of its employees would be subject to government and/or regulatory action; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
SOURCE Bragar Eagel & Squire, P.C.
iX Biopharma secures Australian cannabis manufacture licence
Specialty pharmaceutical company iX Biopharma Ltd (SGX:42C) (“iX Biopharma” or, together with its subsidiaries, “the Group”) is pleased to announce today that its wholly-owned subsidiary, iX Syrinx (“Syrinx”), has been awarded a cannabis manufacture license from the Australian Office of Drug Control under the Narcotics Drugs Act 1967. Under the said licence, the Group is permitted to manufacture and supply extracts and tinctures of cannabis and cannabis resins.
This marks a significant milestone for the Group. Syrinx operates a TGA cGMP certified facility and holds import and export licences for cannabis and State poisons licences; together with the newly granted cannabis manufacture licence, the Group is now able to fully participate in the global medicinal cannabis business.
Importantly, the Group will be able to manufacture and distribute its newly formulated Xativa™ sublingual cannabis wafers in Australia through the Australian Special Access Scheme and in overseas markets. Xativa™ leverages on iX Biopharma’s novel and patented WaferiX™ technology to improve the speed and level of absorption and predictability of effect of medicinal cannabis. Xativa™ provides patients with a more elegant and discreet way to consume medicinal cannabis compared to existing dosage forms for cannabis such as joints, vapes and tinctures, and hence offers a superior user experience. The Group has received feedback from physicians in Australia that the advantages of Xativa™ and its differentiation from the rest of the market offerings are clear and highly desired.
Produced via iX Biopharma’s proprietary freeze-drying technique, the porous and amorphous WaferiX™ matrix holding the active CBD molecules is designed to collapse quickly within the sublingual space. The actives are then transported rapidly across the sublingual membrane into the blood vessels for a rapid onset of action.
“Globally, the use of cannabis for the treatment of a wide range of medical conditions has been growing at an exponential pace. The grant of the cannabis manufacturing licence has come at a most opportune time, allowing us to manufacture, distribute and promote Xativa™ as the gold standard in medicinal cannabis delivery, thereby charting a new growth trajectory for the Group,” said Ms Eva Tan, Director of Corporate and Commercial Strategy of iX Biopharma.
SOURCE iX Biopharma Ltd
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