NEW YORK, NY — February 14, 2005 — Investment firm W. P. Carey & Co. LLC (NYSE: WPC) announced today that it acquired and leased back a corporate headquarters building of HMS Healthcare, Inc., a private equity-owned holding company that owns and operates non-risk bearing Preferred Provider Organization (PPO) networks with a strong presence in Michigan and Colorado. Through its network of physicians, hospitals and other specialty healthcare providers, HMS facilitates the delivery of healthcare benefits to approximately 1.6 million people. HMS Healthcare, which is owned by Denver, Colorado based KRG Capital Partners, LLC and management, will guarantee the lease for $18.6 million.
The transaction was completed on behalf of Corporate Property Associates 16 – Global Incorporated (CPA®:16 - Global), a member of the $7 billion W. P. Carey Group of income generating, publicly held, non-traded real estate investment trusts (REITs). The 95,000 square foot office facility will be leased for an initial term of 20 years, followed by two ten-year renewal options.
This latest acquisition adds to W. P. Carey’s growing portfolio of managed properties in Michigan, which consists of more than five million square feet. The W. P. Carey Group owns properties throughout Michigan leased to Detroit Diesel Corporation, PETsMART Inc., SportsRack LLC, LifeTime Fitness, Collins & Aikman Products and Kerr Corporation.
Benjamin P. Harris, Executive Director of W. P. Carey & Co. LLC, said, “This transaction is an excellent example of how private equity firms can maximize the value of their portfolio company’s real estate assets. Our flexibility and ability to customize this sale-leaseback transaction allowed us meet the specific financing needs of KRG Capital. We are pleased with its successful completion and proud to call HMS Healthcare our newest tenant.”
Mark King, Founder and Managing Director for private equity fund KRG Capital Partners, said, “W. P. Carey was an excellent partner during the entire sales process and we could not be happier with the outcome of the transaction. W. P. Carey distinguished themselves by crafting a structure that maximized the value of the real estate asset without compromising our important business needs. Moreover, during the due diligence and closing process, W. P. Carey remained committed to working through complex issues that ultimately resulted in a win / win transaction for both parties.”
HMS HEALTHCARE
Headquartered in Denver, Colorado, HMS Healthcare is a holding company for leading regional rental/access network Preferred Provider Organizations. The platform company, Sloans Lake Managed Care (SLMC) is the largest rental network PPO in the state of Colorado, and HMS’s first add-on acquisition, PPOM LLC, is the largest independent PPO in the state of Michigan. The Company facilitates delivery of healthcare benefits to nearly 1.75 million lives in Colorado, Michigan, Ohio, and in certain areas of Indiana, Kentucky and Wisconsin. HMS’s third acquisition, Mountain Medical Affiliates, further strengthened the Company’s network in the State of Colorado. With strong networks in place, the Company develops and maintains healthcare provider networks, re-prices claims, and provides medical management and other ancillary services directed at payors and providers.
KRG CAPITAL PARTNERS, LLC
Founded in 1996, KRG is a Denver based private equity buyout firm that currently manages over $1 billion of committed equity capital and equity co-investments. Since inception, KRG has invested in 19 "platform companies" and has completed 57 add-on acquisitions for those platforms. www.krgcapital.com.
W. P. CAREY & CO. LLC
Founded in 1973, W. P. Carey & Co. LLC specializes in helping companies and private equity firms realize the capital tied up in their real estate assets. Whether used for buyouts, add-on acquisitions, recapitalizations or growth, net lease financing provides access to 100% of the real estate's value enabling companies to maintain complete operational control. Acting as principals in transactions from $5 million to $500 million, W. P. Carey and its affiliates have committed approximately $3 billion over the last three years and now manage more than $7 billion in assets. www.wpcarey.com/finance
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This press release contains forward-looking statements within the meaning of the Federal securities laws. A number of factors could cause the company’s actual results, performance or achievement to differ materially from those anticipated. Among those risks, trends and uncertainties are the general economic climate; the supply of and demand for office and industrial properties; interest rate levels; the availability of financing; and other risks associated with the acquisition and ownership of properties, including risks that the tenants will not pay rent, or that costs may be greater than anticipated. For further information on factors that could impact the company, reference is made to the company’s filings with the Securities and Exchange Commission.