Sabra Health Care REIT and Chicago's Care Capital Properties are merging in a $7.4B, all stock deal.

The merged firm, called Sabra, will be based in Irvine, California, where Sabra is headquartered. The total market cap will be $7.4B, with equity market cap of about $4.3B.

The company will be led by Sabra Health Care CEO Rick Matros, the companies reported Sunday night as they announced the deal.

"It greatly enhances the value for our shareholders due to the scale of the new enterprise, improved cost of capital, improved liquidity and the ability to compete more for deals," Matros said.

Sabra's Talya Nevo-Hacohen will be chief information officer, and Sabra's Harold Andrews will be chief financial officer.

Care Capital Properties CEO Raymond Lewis will join Sabra's board of directors, along with two other Care Capital Properties directors.

The merger will help the combined company to diversify among tenants, with no single tenant responsible for more than 11% of annualized net operating income. It should generate annual cost savings of about $20M.

The firm's combined portfolio will include 564 investments in 43 states and Canada.

When the merger closes, Sabra shareholders can expect to own 41% of the combined company. Care Capital Properties shareholders are slated to own 59%. Shareholders from both companies still need to sign off on the deal.

The merger should close in Q3 of this year.