The Dealmakers Forum E-Newsletter, April 23, 2014 - Senior Housing Properties Trust Went to Market With a 12 Million Share, ALFA/ASHA Merger Update

 

Bringing You Senior Care M&A Deals and News
 

April 23, 2014 Issue:

Seniors Housing Weekly Update: 60 Seconds with Steve Monroe
Curing Alzheimer's Disease. Now one of the fastest growing diseases, but one with few treatments and no cures, Alzheimer's Disease needs attention and funding............ Read More

 

Recent Senior Care M&A Deals

Home Health Care

 

 

Acquirer

Target

Price

The Ensign Group, Inc.

Home Health and Hospice Agency

N/A

Long-Term Care

 

 

American Realty Capital Healthcare Trust

11 senior care facilities

$104 million

HealthLease Properties REIT

4 senior care properties

$49.4 million

 

Deal of the Week

On the market for just seven days, a 13-year old assisted living and memory care community in Michigan saw a lot of acquisition interest. Built in 2001 with 80 units and current occupancy of 88%, the community operated at a 24% EBITDA margin with rents that ranged from $4,100 to $6,000 per month. While we are not sure whether the new owner will be able to improve on what the CPA seller could do, there does seem to be some upside potential. Although located in Michigan, it is considered to be in the Toledo, Ohio market area. The purchase price was $14.6 million, or $182,500 per unit, and Evans Senior Investments represented the seller.......... 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

Last week, Senior Housing Properties Trust went to market with a 12 million share public offering with Jefferies, BofA Merrill Lynch, Citigroup, Morgan Stanley and RBC Capital Markets as the joint bookrunning managers. The next day the offering was increased by 1.5 million shares and priced at $21.75 per share. The underwriters then exercised their option to sell an additional 2.025 million shares, resulting in total gross proceeds of $337.67 million. The share price is already up 5% since last week. Just a week before, Aviv REIT sold 8.0 million shares at $24.10 per share, and its share price is up nearly 7%.............Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Stat of the Week

Occupancy always appears to be a more important statistic for seniors housing than skilled nursing, something that is tracked quarter to quarter. For skilled nursing, it is what makes up that census that is more important than just the number of patient days. But for acquisitions in the skilled nursing market in 2013, there was a significant difference between “stabilized” nursing facilities (defined as 85% and higher occupancy) and non-stabilized facilities. On average, stabilized nursing facilities sold for $88,800 per bed, compared with $50,300 per bed for non-stabilized facilities. That spread of $38,500 per bed was much wider than in 2012, when the spread was just $21,600 per bed ($70,300 vs. $48,700). The wide spread in 2013 was partly a result of the record average price per bed in the market, a record that may be difficult to top anytime soon.........Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

ALFA/ASHA Merger Update 

We have heard from board members of the American Seniors Housing Association (ASHA) that the discussions with ALFA for a possible merger between the two associations have been called off. It didn’t appear that there was sufficient backing from the broader ASHA board to move forward, so the two organizations will remain separate. But as a result of these merger discussions, there could be a change in focus at either organization, or a stronger focus in one direction or another, and we also suspect that some new initiatives may be bandied about in the coming months. But for now, it will be business as usual, and more importantly, no major confrontation..........Want to read more news? Click here for a free trial to The SeniorCare Investor and download the current issue today

 

Expert Opinion: A Conversation with Jim Stroud 

In this "Expert Opinion" interview, Jim Stroud, President, Stroud Companies, discusses prototypes, HUD, the Great Recession, memory care, and more.......Watch the video

 

NEW - The Senior Care Acquisition Report, 19th Edition - Just Published!
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. Order by April 30th and get our Senior Care M&A Market Review and 2014 Outlook webcast for FREE ($147 value). Now that’s a deal! Go to http://www.levinassociates.com/landing/scar19order or call 800-248-1668 to preorder today.

 

Upcoming Interactive Webcast:

Marketing Strategies to Improve—or Maintain—Occupancy
Thursday, May 15, 2014, 1:00 pm ET
When did you last have a waiting list for your community? Occupancy levels are crawling back to pre-2008 levels in most locations, but no one takes “full occupancy” for granted anymore. Consumers have changed, too. The new generation of prospects—and their family members—will want new environments, active lifestyles, and engaging activities. And they’ll expect to know exactly what they’re contracting for in terms of costs, options, and care. Go to http://www.levinassociates.com/conferences/1405b-online-conference or call 800-248-1668 to register.

 

 

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