The Dealmakers Forum E-Newsletter, February 26, 2014 - REIT Investment Concentration, Brookdale Senior Living’s Acquisition of Emeritus

 

Bringing You Senior Care M&A Deals and News
 

February 26, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
REIT Investment Concentration. With the acquisition of Emeritus by Brookdale Senior Living, 571 of the combined entity's properties will be owned by just three REITs..... Read More

 

Recent Senior Care M&A Deals

Long-Term Care

 

 

Acquirer

Target

Price

Revera Inc.

Sunrise Senior Living

$300 million

(estimated)

American Realty Capital Healthcare Trust

4 assisted living communities

$25 million

Comprehensive Healthcare Management

Villages of Orleans Health & Rehab Center

$7.8 million

Sabra Health Care REIT, Inc.

Six senior housing campuses

$90.0 million

Madison Realty

Six-Assisted-Living-Facility portfolio

N/A

Brookdale Senior Living Inc.

Emeritus Corp.

$2.8 billion

 

Deal of the Week

What other deal would be the “deal of the week” but Brookdale Senior Living’s acquisition of Emeritus, creating by far the largest senior living company in the country with no peer, at least in terms of size. The $2.8 billion value, which includes $1.4 billion of assumed mortgage debt, provides Emeritus shareholders with a 32% premium to the closing stock price on February 20. It appears as if up to 40% of Emeritus shareholders pocketed the gain already, not wanting to wait to receive 0.95 Brookdale shares for each of their shares. Usually in stock deals such as this, the buyer’s share price dips because of the dilution with the new shares that will be issued, or it dips because the buyer’s shareholders don’t like the deal for other reasons. But Brookdale actually closed up 1.5% the day after the announcement, and is now up about 4.5%. We suppose Brookdale shareholders didn’t listen to us last week, when we said it was a great deal for Emeritus but not so great for Brookdale. Time will tell, but 1,100 properties, with 1,100 ED’s, will not be an envious management job....... Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Financing of the Week

NorthMarq Capital recently closed on the refinancing of a 118-unit independent living unit in Elkhorn, Nebraska with a total loan amount of $16.2 million, or $137,300 per unit. What was somewhat unique to this loan was that it was placed with a life insurance company, and you don’t see that happening too often. Second, it was a fixed rate, fully amortizing, 18-year loan, something you also don’t see too often in the market. The first phase with 59 units opened in 2007 and quickly filled. The second phase, also with 59 units, is attached to the first phase with the clubhouse and opened in late 2011. The entire project broke through 90% occupancy last year, and there is some room for further expansion. The operator, Nebraska-based Dial Senior Management, Inc., owns a 64-unit assisted living community down the road so we expect they will utilize that relationship. Jason Kinnison of NorthMarq arranged the financing.......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

Capital Senior Living may be benefitting from the Emeritus surge. Its stock is up nearly 9% since February 1, and investors are looking to see whether it may be next on someone’s radar to purchase. It owns a good mix of its properties, and has pretty much stuck to its knitting. And, what makes buyers lick their lips, it is a clean company and simple to understand and value. On Thursday night the company will release its fourth quarter and year-end earnings, so we will see what happens with its share price Friday morning. But after a slow start in January, it may be back on its 2012 track. ........Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

NEW - The Senior Care Acquisition Report, 19th Edition - Preorder Today and Get Last Year's FREE ($595 Value)!
Deals have been made. The 2014 Senior Care Acquisition Report contains private deals in this market that are frequently too small to make into financial press. Take advantage of our limited 2-for-1 offer - Preorder The 2014 Senior Care Acquisition Report by February 28th and receive The 2013 Senior Care Acquisition Report FREE ($595 value)! Now that’s a deal! Go to http://www.levinassociates.com/landing/scar19order or call 800-248-1668 to preorder today.

 

Tomorrow: Interactive Webcast:
Senior Care M&A Market Review and 2014 Outlook

Sponsored by Lancaster Pollard
Thursday, February 27, 2014, 1:00 pm ET

Our panel of industry experts will analyze 2013 M&A statistics for this sector and provide their outlook for 2014. Will capital remain relatively cheap? Are SNF acquisitions still too risky? How much consolidation should we expect in the CCRC world? Who’s buying—and who’s selling—what? And how is RIDEA changing the game? Go to http://www.levinassociates.com/conferences/1402b-online-conference or call 800-248-1668 to register.

 

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