PHP moves closer to full dividend cover after AMP acquisition

Primary Health Properties (PHP) announced Friday its acquisition of Apollo Medical Partners (AMP), an investor in primary care and pharmacy properties in the UK.PHP, one of the UK's largest providers of modern purpose built primary healthcare facilities, has purchased the entire issued share capital of AMP in a £10.2m deal. AMP owns 14 primary care properties in the UK. Eleven are completed assets and the remaining three are due for completion next year. Lambert Smith Hampton has valued the entire portfolio at £62.3m, which includes a fixed debt of £49.8m and transaction costs. PHP is to pay £4.2m in cash on completion while £1.8m in cash will be deferred until delivery of assets under construction.AMP's vendors will receive 1,231,395 new ordinary shares of 50p each in the capital of PHP, subject to a 12-month lock-in. PHP believes that the acquisition adds high quality assets to its existing portfolio and increases its recurring income surplus which will reduce the proportion of its current dividend that is partially uncovered by earnings.Harry Hyman, Managing Director of PHP, said: "This is an important acquisition for PHP which demonstrates our ability to acquire modern, well-let portfolios at cash yields ahead of the current portfolio net initial yield. The acquisition adds 14 high quality assets to our existing portfolio, boosts PHP's rental profits and is in line with management's aim of returning to full dividend cover at the earliest opportunity."PHP's portfolio will comprise of 183 primary care properties with a total value of £643.3m following the transaction. RD