The Dealmakers Forum E-Newsletter, March 20, 2013 - Cap Rates and Risk, Assisted Living Concepts, Emeritus Corporation Stock Has Dropped

 

Bringing You Senior Care M&A Deals and News
 

March 20, 2013 Issue:

 

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Cap Rates and Risk. Interest rates are down and cap rates are not, which means that risk is appropriately priced.... Read More

 

Recent Senior Care M&A Deals

LONG-TERM CARE

Acquirer

Target

Price

Capital Senior Living

Marquis Place of Elkhorn

$6.6 million

Tryko Partners LLC

New Eastwood Care & Rehabilitation Center

$6.3 million

 

Deal of the Week: LCB Senior Living

Newly formed LCB Senior Living has snagged a $40 million equity commitment from the New York-based real estate private equity firm Berkshire Realty Ventures. Based in Massachusetts, LCB Senior Living consists of the former management team of Newton Senior Living, which was sold to Lazard Freres and its Atria Senior Living management company in 2005. The new equity commitment can be leveraged, so that means LCB will be able to acquire or develop over $100 million of senior living communities, focusing in the Northeast. LCB is already managing two of its former properties, and the new capital will allow the manage team to achieve some scale. The first acquisition may be in New Hampshire. Richard Swartz and Phil Anderson of Cushman & Wakefield’s Senior Housing Capital Markets Group handled the capital raise and advised Berkshire...... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Assisted Living Concepts

After agreeing to a sale of the company to private equity firm TPG Group, Assisted Living Concepts finally came out with its fourth quarter and year-end earnings report. While there was no surprise that earnings and cash flow were much worse than a year ago, the big surprise was that fourth quarter occupancy was up about 150 basis points from the third quarter. Did the new marketing effort finally pay off? Did the higher staffing levels help with the marketing? We may never know, but if the increase is real, meaning not too many giveaways, and sustainable, TPG must be very happy, but they probably knew it already from their due diligence. Will the increase be enough to get some of the previous bidders from last year back in the mix to top the $12.00 per share deal on the table? That is doubtful, but even late in 2012 there were other bidders at or above $12.00, even as high as $14.25 per share. But are they sharpening their pencils before it is too late?........ Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Stock of the Week: Emeritus

Emeritus Corporation has dropped by 14% from its recent high as a result of the announcement that a major holder was selling its shares in a secondary, along with senior management. Some analysts thought the sale by Apollo of shares that were acquired several years ago when it sold a portfolio company to Emeritus removed some “overhang” on the market and would help with market liquidity in general. Other investors didn’t see it that way, which is why the shares dropped. And the decline had little to do with the large punitive damages against Emeritus for alleged poor patient care. Still, there is the opinion, shared by Deutsche Bank, that subsequent to the drop, Emeritus shares are undervalued. In fact, Deutsche Bank has a target price of $35.00 per share, compared with a recent price below $27.00, while Stifel Nicolaus has a target price of $32.00. The underwriters exercised their overallotment option as part of the secondary, so an extra $31 million can be used to pay off some high-rate debt, increasing earnings slightly. While the recent drop in price may represent a buying opportunity, the entire sector got a little overheated in recent months and may need a breather......read more

 

For Sale - 65 Bed ALF + 18 Bed Approved Expansion
For Sale - 65 Bed ALF + 18 Bed Approved Expansion in the growing Baltimore/Annapolis corridor. Facility has strong demographics. Great rental history. Facility has an Alzheimer’s unit. Very well maintained. No deferred maintenance. Near major hospitals and enjoys a stellar reputation. Prestige Group’s Senior Housing Division - The premier brokerage firm for Senior Housing and Healthcare facilities sales. We have an unparalleled reputation for providing our clients with superior service by way of our in depth industry knowledge, local, regional and national relationships. Our goal is to have an understanding of our clients’ specific needs. Our Proven Marketing System provides our clients with individualized attention. Prestige Group’s immersion in each transaction and dedication to the Senior Housing Market enables us to deliver successful results to our clients. Call Ron Krieger, EVP, for information about the 65 bed ALF for sale and for a confidential conversation about your needs. 800.866.5876 x102......more about Prestige Group

 

NEW - The Senior Care Acquisition Report, 18th Edition - Preorder Today!
Deals have been made. The 2013 Senior Care Acquisition Report contains private deals in this market that are frequently too small to make it into the financial press. Take advantage of our limited 2-for-1 offer - Preorder The 2013 Senior Care Acquisition Report  by March 31st and receive The 2012 Senior Care Acquisition Report  FREE ($595 value)! Now that’s a recession resistant deal. Go to http://www.levinassociates.com/scardescription or call 800-248-1668 to preorder today!

 

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