Assura plc Recommends Cash Acquisition

Summary

• The boards of directors of Assura and Bidco are pleased to announce that they have reached agreement on the terms of a recommended cash offer for the entire issued and to be issued ordinary share capital of Assura by Bidco. The Acquisition is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.

• Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in this Announcement and the full terms and conditions to be set out in the Scheme Document, each Assura Shareholder shall be entitled to receive:

for each Assura Share                       49.4 pence in cash (the “Offer Value”)

comprising, for each Assura Share held:

1. 48.56 pence in cash from Bidco (the “Cash Consideration“); and
2. a quarterly interim dividend of 0.84 pence announced on 18 February 2025 and due to be paid on 9 April 2025 (the “Permitted Dividend“).

• The Offer Value represents 100 per cent. of Assura’s EPRA NTA per Assura Share of 49.4 pence as at 30 September 2024.

• The Offer Value represents an attractive premium of approximately:
  • 31.9 per cent. to the Closing Price of 37.4 pence per Assura Share on 13 February 2025 (being the last Business Day prior to 14 February 2025, the commencement of the Offer Period);
  • 33.9 per cent. to the volume weighted average price of 36.9 pence per Assura Share for the one-month period ended 13 February 2025; and
  • 30.6 per cent. to the volume weighted average price of 37.8 pence per Assura Share for the three-month period ended 13 February 2025.

• The Acquisition values the entire issued and to be issued ordinary share capital of Assura at approximately £1,608 million on a fully diluted basis.

• Where any dividend, distribution or other return of capital is announced, authorised, declared, made or paid or becomes payable in respect of Assura Shares on or after the date of this Announcement (other than the Permitted Dividend):
  • if such dividend, distribution and/or other return of capital is paid or made prior to the Effective Date, then Bidco reserves its right to reduce the Cash Consideration by an amount up to the aggregate amount of such dividend, distribution and/or other return of capital; or
  • if and to the extent that such dividend, distribution and/or other return of capital is not paid or made or is not payable in respect of Assura Shares prior to the Effective Date, such dividend, distribution and/or other return of capital shall be cancelled, and the Cash Consideration shall not be subject to change in accordance with this paragraph.

• If Bidco exercises its rights to reduce the Cash Consideration as described in the preceding paragraph, Assura Shareholders would be entitled to retain any such dividend, distribution or other return of capital, and any reference in this Announcement to the Cash Consideration shall be deemed to be a reference to the consideration as so reduced. Any exercise of such right by Bidco shall be the subject of an announcement and not be regarded as constituting any revision or variation of the terms of the Scheme.

The cash consideration payable under the Acquisition is priced in pounds Sterling. However, Assura Shareholders on the South African register will, as is required, receive any such cash consideration due to them under the terms of the Acquisition in South African Rand. The Scheme Document will include further details in relation to this currency exchange.

Transaction overview

• Cash acquisition of Assura by Bidco, recommended unanimously by the Assura Board.

• Assura is a market leading investor and developer of specialist healthcare infrastructure assets in the UK and Ireland.

• Against the backdrop of shifting demographic and structural trends, KKR and Stonepeak believe that Assura has a crucial and growing role to play in the provision of critical healthcare infrastructure in the UK and Ireland over the long term.

• KKR and Stonepeak further believe that Assura has a highly attractive portfolio of assets and a management team with significant industry knowledge and experience, which meet the objectives of KKR’s and Stonepeak’s respective infrastructure investment strategies.

• KKR and Stonepeak recognise that Assura has a capital-intensive strategy and believe that private ownership can better access this significant opportunity by allowing Assura to make sustained capital investments without the need for asset sales

• KKR and Stonepeak intend to support the Assura management team and its strategy of asset development, enhancement and acquisition in the specialist healthcare infrastructure space as well as its sustainability and social objectives. KKR’s and Stonepeak’s extensive access to long term capital and their global network and expertise will enable the Assura team to accelerate its investment strategy and grow Assura’s asset base under private ownership.

Assura recommendation

• The Assura Directors, who have been so advised by Lazard as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing their advice to the Assura Directors, Lazard has taken into account the commercial assessments of the Assura Directors. Lazard is providing independent financial advice to the Assura Directors for the purposes of Rule 3 of the Takeover Code.

• Accordingly, the Assura Directors intend to recommend unanimously that Assura Shareholders vote in favour of the Scheme at the Court Meeting and that Assura Shareholders vote in favour of the Special Resolutions to be proposed at the Assura General Meeting.

Irrevocable undertakings

• Assura Directors who hold interests in Assura Shares have irrevocably undertaken to vote (or procure votes) to approve the Scheme at the Court Meeting and to vote (or procure votes) in favour of the Special Resolutions to be proposed at the Assura General Meeting (or, if the Acquisition is subsequently structured as a Takeover Offer, to accept (or procure the acceptance of) any Takeover Offer made by Bidco in accordance with the terms of the irrevocable undertaking) in respect of their own beneficial holdings for which they control the voting rights (and the beneficial holdings of their close relatives), amounting to an aggregate of 4,638,828 Assura Shares, representing approximately 0.1 per cent. of Assura’s issued ordinary share capital on the Latest Practicable Date.

• Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.

Information on Assura

• Assura is the UK’s leading diversified healthcare real estate investment trust (REIT), specialising in the development, investment and management of primary care centres, hospitals and other specialist healthcare properties. Founded and listed on the London Stock Exchange in 2003 as the Medical Property Investment Fund before being renamed Assura Group Ltd and later Assura plc, Assura is a constituent of the FTSE 250 and the EPRA indices and has a secondary listing on the Johannesburg Stock Exchange. In July 2024, Assura became a B Corporation, making it the first FTSE 250 business to be recognised with the certification. Assura had a market capitalisation of £1.2 billion as at the Undisturbed Date and has a strong track record of growing financial returns and dividends for shareholders.

• Assura is the long-term property partner to more than 600 healthcare buildings with access to four growth markets: GPs, NHS Trusts, private providers and the Republic of Ireland. The Company leverages its unique understanding of the challenges facing the healthcare sector, and two decades of experience, to provide high-quality, modern and sustainable facilities that enable better health outcomes for over six million patients across the UK and Ireland. As at 30 September 2024, Assura’s portfolio was valued at over £3.1 billion.

• For the purposes of Rules 29.1(a) and 29.1(d) of the Takeover Code, an updated valuation of Assura’s property portfolio as at 31 March 2025 will be included in the Scheme Document (or, if applicable, the Offer Document).

Information on Bidco, KKR and Stonepeak

• Bidco is a newly formed company indirectly wholly owned by (i) funds advised by KKR and (ii) funds advised by Stonepeak.

• KKR is a leading global investment firm with $638 billion in assets under management (as of December 2024). KKR invests globally across private equity, credit and real assets like infrastructure and real estate, and also offers capital markets and insurance solutions.

• KKR has significant experience and deep roots in infrastructure investing. KKR established its Global Infrastructure strategy in 2008 and has since been one of the most active infrastructure investors around the world, with a team of over 160 individuals, including more than 130 investment professionals and over 30 additional value-creation executives that are fully dedicated to Infrastructure. The firm has made nearly 100 infrastructure investments spanning the globe across various sectors including renewables, utilities, midstream, transportation, water and communications, and currently manages in excess of $80 billion in infrastructure AUM.

• KKR will invest in the Acquisition through KKR’s diversified core infrastructure strategy, which buys and holds core infrastructure assets within an open-ended structure, which KKR believes best aligns with the long-term nature of the underlying assets. The stability that this open-ended capital delivers aligns strongly with Assura’s strategy.

• The Acquisition would further strengthen KKR’s presence and investment activity in the UK, where KKR has a long track record. KKR’s first investment in the UK was in 1996 and its office in London was opened in 1999, which has since grown to ~130 investment professionals and is the headquarters of the European infrastructure business. KKR has invested over £20 billion of capital in the UK across all asset classes, including some of the UK’s largest infrastructure businesses including Hyperoptic, Viridor, SMS, John Laing, ContourGlobal, Northumbrian Water, Zenobē, and Dawsongroup.

• Stonepeak is the world’s largest independent infrastructure specialist, managing approximately $72 billion of assets (as of September 2024). With a team of more than 150 investment professionals focused exclusively on infrastructure, Stonepeak identifies thematic opportunities to invest capital into businesses that provide essential services powering economic and social advancement in sectors with durable tailwinds. Over the past 14 years, Stonepeak has also made successful investments across Real Estate and Credit, building diversified strategies across these sectors in support of its core specialism of Infrastructure.

• Stonepeak has made more than 70 infrastructure investments operating across more than 60 countries across its target sectors of Digital Infrastructure, Energy and Energy Transition, Transportation and Logistics, and Social Infrastructure. To date, Stonepeak has invested in Social Infrastructure subsectors including Education, Healthcare, and Public Safety Infrastructure. The Acquisition represents a natural fit for Stonepeak as it features classic infrastructure characteristics including the provision of a highly essential service and an attractive financial profile with predictable and inflation-linked cashflows.

• Stonepeak will invest in the Acquisition through its Global Core strategy, which targets core infrastructure assets located in developed markets globally, with a focus on cash yields and long-term, inflation-linked revenue streams.

• From its London office, opened in 2022, Stonepeak provides capital, hands-on operational support and partnership to its critical investments in European infrastructure, committing $6 billion of investment to date. Several of these European investments are headquartered in or operate in the UK, including euNetworks, The AA, and Inspired Education.

Timetable and Conditions

• The Acquisition will be put to Assura Shareholders at the Court Meeting and at the Assura General Meeting. The Court Meeting and the Assura General Meeting are required to enable Assura Shareholders to consider and, if thought fit, vote in favour of the Scheme and the Special Resolutions required to implement the Scheme. In order to become Effective, the Scheme must be approved by a majority in number of the Assura Shareholders present and voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Assura Shares voted. In addition, the Special Resolutions to implement the Scheme must be passed by Assura Shareholders representing at least 75 per cent. of votes cast at the Assura General Meeting.

• The Acquisition is subject to the Conditions and further terms set out in Appendix I to this Announcement. It is expected that, subject to the satisfaction or waiver of all relevant conditions, the Acquisition will become Effective early in the third quarter of 2025.

• The Scheme Document, containing the full terms and conditions of the Acquisition, further information about the Acquisition (including a portfolio valuation as at 31 March 2025 reported on in accordance with Rule 29 of the Takeover Code) and notices of the Court Meeting and the Assura General Meeting, together with the forms of proxy, will be published within 28 days of the date of this Announcement (or such later date as Bidco, Assura and the Panel agree).

Commenting on the Acquisition, Ed Smith, Non-Executive Chair of Assura, said:

“The board of Assura is focused on delivering maximum value for Assura Shareholders. The cash offer from KKR and Stonepeak allows Assura Shareholders to realise their investment at an attractive price. At the same time, I am confident that the Company will continue to flourish under the ownership of KKR and Stonepeak. With the benefit of the additional capital that KKR and Stonepeak can provide, Assura will be able to continue to support the NHS and other healthcare providers in delivering improved health outcomes.”

Commenting on the Acquisition, Jonathan Murphy, Chief Executive Officer of Assura, said:

“The cash offer from KKR and Stonepeak offers an attractive opportunity for Assura Shareholders to crystallise value immediately and enables the Company to accelerate its growth via additional investment in critical healthcare infrastructure in the UK and Ireland. My team and I look forward to working closely with KKR and Stonepeak in the years ahead.”

Commenting on the Acquisition, Tara Davies, Partner, Co-Head of EMEA and Co-Head of European Infrastructure at KKR, said:

“Assura is a market leader in healthcare infrastructure and we share the company’s objective of building best-in-class facilities to support the delivery of national healthcare objectives. Delivering this effectively requires significant investment in Assura’s platform, a long-term perspective and the ability to fund Assura’s growth through long-term and flexible capital. Together, KKR and Stonepeak bring deep pockets and understanding of UK infrastructure and real estate, and a shared track record of accelerating growth and investment.”

Commenting on the Acquisition, Nikolaus Woloszczuk, Senior Managing Director at Stonepeak, said:

“Assura represents a strong fit for our Core infrastructure strategy with its long-term, contracted customer relationships, the inflation-linked nature of the business, and its essentiality as healthcare needs increase in the UK. Its primary care centres and hospitals play an important role in the provision of healthcare services across the country. Ensuring that these assets can continue to fulfil an essential service to communities, now and in the future, is a core focus of the consortium and we believe this will be more effectively and more sustainably achieved in private ownership. Stonepeak and KKR share a common approach to infrastructure investing based on active operational engagement, and we will bring all our resources to bear in supporting Assura’s management team deliver on their long-term ambitions for the company.”