In September 2018, the board of directors of CVMC REIT II formed a special committee, consisting solely of independent directors, to review a potential merger with CVMC REIT I, and the board of directors of CVMC REIT I formed a special committee consisting solely of independent directors to review strategic alternatives. While CVMC REIT I and CVMC REIT II have several overlapping independent directors, no member of the CVMC REIT I special committee served on the CVMC REIT II special committee or participated in the deliberations of the CVMC REIT II board of directors with regard to the transaction, and vice versa.
To assist in the strategic alternative reviews, the CVMC REIT I Special Committee engaged Moelis as its financial advisor, Duff & Phelps LLC to provide additional financial advisory services, and DLA Piper as legal advisor, while at the same time, the CVMC REIT II Special Committee engaged SunTrust Robinson Humphrey, a division of SunTrust Bank, as exclusive financial advisor and Venable as legal advisor.
After multiple rounds of negotiations that lasted several months, the CVMC REIT I and CVMC REIT II Special Committees recommended that each company enter into the merger agreement, which we announced today.
Under the terms of the merger agreement, CVMC REIT I has the right to solicit superior proposals from interested third parties for 45 days. This is theGo-Shop period that I referred to at the start of this presentation.
The merger is subject to the CVMC REIT I stockholder vote and, assuming all conditions are met, is expected to close in the second half of 2019.
I would now like to take this opportunity to leave with you a few key thoughts:
The contemplated transaction provides immediate liquidity to CVMC REIT I stockholders totaling approximately $180 million, and when taking into account the special distribution in March of 2018, almost $750 million in the aggregate, excluding ordinary dividends.
The combined company is expected to provide better avenues for ultimate liquidity and value to stockholders of both companies as the combined company will be well diversified by tenancy and geography and have approximately $2 billion in equity and an enterprise value of approximately $3.2 billion.
The combined company will benefit from a highly diversified portfolio of properties and with a particular emphasis of properties in the healthcare sector which are expected to benefit from positive trends in healthcare reimbursements.