NASHVILLE, Tenn. and
SEATTLE, Feb. 20, 2014 /PRNewswire/ -- Brookdale Senior
Living Inc. (NYSE: BKD) and Emeritus Corporation (NYSE: ESC) today
announced the signing of a definitive merger agreement to create
the first national senior living solutions company. The
combined companies will serve the growing market for senior living
solutions as the single branded provider operating the only
nationwide network of senior living communities with fully
integrated ancillary services across the continuum of care.
Following the merger, a Brookdale
community will be within 10 miles of 6.5 million seniors 80 years
or older.
(Logo: http://photos.prnewswire.com/prnh/20130501/NY05812LOGO
)
Under the agreement, Emeritus shareholders will receive 0.95
shares of Brookdale common stock in exchange for each share of
their Emeritus common stock. Based on the closing price of
each company's common stock on February 19,
2014, this exchange ratio implies a 32% premium on Emeritus'
shares. The transaction value totals $2.8 billion, with the inclusion of $1.4 billion of Emeritus mortgage debt. The
transaction is expected to have a neutral impact on Brookdale's Cash From Facility Operations in
the first year of combined operations, which will grow to exceed
$0.40 per share of accretion for the
third year. The transaction is expected to close in the third
quarter of 2014.
Through this merger, Brookdale
will offer consumers nationwide the most comprehensive continuum of
care, which includes independent living, assisted living, dementia
care, skilled nursing, outpatient therapy, home health and hospice
care. The transaction will expand Brookdale's unit capacity by more than
two-thirds to a total of approximately 112,700 units in 1,161
communities in 46 states. The portfolio will be located in
330 markets, where 80% of the U. S. population is located.
Andy Smith, Brookdale's Chief Executive Officer, said, "In
an industry with very attractive long-term growth dynamics, this
strategic merger creates the first national, predominantly
private-pay based, senior living solutions company. This
combination will improve our ability to deliver the best, high
quality solutions for the growing demographic of aging seniors and
their families.
"With still only 10% market share post-merger, we are confident
of our prospects for driving further long-term revenue growth
through organic expansion, while enhancing our position in a
rapidly consolidating industry. In addition, we expect this
combination to produce significant operating efficiencies and to
enable further investment in the on-going improvement of our
service delivery through associate training and education, physical
enhancements to our communities, and refinement of our leading
technology platform. We look forward to welcoming the Emeritus team
members to Brookdale, as well as
the Emeritus shareholders, who will own approximately 27% of
post-merger Brookdale."
Granger Cobb, President and
Chief Executive Officer of Emeritus, said, "Both companies share
many core strengths, but foremost is a resident-centric culture,
with passionate, dedicated associates committed to providing a high
level of customer service. Combining and maximizing the significant
strengths of our two outstanding companies is certain to be of
tremendous advantage in supporting our customers and their families
as they face the challenges of aging. We are also pleased that
Emeritus shareholders will realize compelling and immediate value,
as well as the opportunity to participate in the upside potential
inherent in this powerful combination."
Transaction Benefits
- Significantly enlarges geographic coverage and density –
The addition of Emeritus will expand Brookdale's unit capacity by more than
two-thirds, providing entry into 10 new states and significantly
increasing the Company's presence in many high-population states,
especially in the west and northeast. Units will more than
double in California, New York, Georgia, New
Jersey, Washington and
Massachusetts and increase by more
than 25% in 13 of the country's 15 most populous states.
- Produces positive accretion and enhances opportunities to
increase operating efficiency – The merger is expected to
produce ongoing opportunities to achieve economies of scale for
purchases of items such as insurance, food and benefits and to
improve leverage of general and administrative expenses.
- Builds Brookdale's real
estate portfolio – Creates one of the largest owned senior
housing real estate portfolios in the country. Additionally,
with over 1,100 communities post-merger, Brookdale expects to continue earning a strong
return on its investment in portfolio expansion and repositionings
through its redevelopment program, named Program Max.
- Expands potential for ancillary service growth – The
combination will enable Brookdale
to expand its therapy, home health and hospice ancillary programs
into Emeritus communities and accelerate the introduction of
Emeritus' Nurse on Call home health services into Brookdale's major markets.
- Strengthens the brand – Consistent with Brookdale's major branding initiative
commenced in mid 2013, the larger national platform created by this
transaction allows Brookdale to
build brand awareness more efficiently and effectively, reaching
more seniors and their families who can benefit from the Company's
services.
Leadership
Andy Smith will serve as Chief
Executive Officer and Mark Ohlendorf
as President and Chief Financial Officer of the combined company.
It is anticipated that certain members of Emeritus' senior
management team will continue in senior positions after the
merger. It is also anticipated that Granger Cobb will be
joining Brookdale's Board of
Directors, and will continue in a consulting role with the company.
The Company's corporate headquarters will remain in
Nashville.
Additional Information
The Boards of Directors of both Brookdale and Emeritus have unanimously
approved the merger, which is expected to be completed in the third
quarter of 2014, subject to receipt of regulatory approvals
(including pursuant to the Hart-Scott-Rodino Antitrust Improvements
Act) and shareholder approvals for each company, as well as other
customary closing conditions.
BofA Merrill Lynch and CS Capital Advisors are serving as
financial advisors to Brookdale
and Skadden, Arps, Slate, Meagher & Flom LLP and Bass, Berry
& Sims PLC are serving as its legal advisors. Wells Fargo
Securities is serving as lead financial advisor, and Moelis
& Company is also serving as financial advisor to provide an
independent fairness opinion to Emeritus; Perkins Coie
LLP is serving as Emeritus' legal advisor.
More information on the transaction can be found at
www.emeritusforward.com or www.brookdaleforward.com.
Conference Call Details
Brookdale and Emeritus will
host a conference call at 5:30pm Eastern
time today to discuss the announcement. Domestic and
international participants may access the conference call by
dialing (866) 900-2996 (US/Canada Toll Free) and (706) 643-2685
(International Toll) respectively, and using the access code
"34939607". The live conference call and the conference call replay
will be available under the investor relations section of each
company's website, at www.brookdale.com and www.emeritus.com. To
access a telephonic replay of the conference call, please dial
(855) 859-2056 (US/Canada Toll Free) or (404) 537-3406
(International Toll), using the access code "34939607".
A set of slides which will be referred to on this webcast will
be posted to the Brookdale and
Emeritus websites prior to the call.
About Brookdale Senior Living
Brookdale Senior Living Inc. is a leading owner and operator of
senior living communities throughout the United States. The
Company is committed to providing senior living solutions within
properties that are designed, purpose-built and operated to provide
the highest-quality service, care and living accommodations for
residents. Currently Brookdale operates independent living,
assisted living, and dementia-care communities and continuing care
retirement centers, with 649 communities in 36 states and the
ability to serve approximately 67,000 residents. Through its
ancillary services program, the Company also offers a range of
outpatient therapy, home health, personalized living and hospice
services. Brookdale's stock
is traded on the New York Stock Exchange under the ticker symbol
BKD.
About Emeritus
Emeritus Senior Living is the nation's largest assisted living
and memory care provider, with the ability to serve nearly 54,000
residents. Over 31,000 employees support more than 500 communities
throughout 45 states coast to coast. Emeritus offers the spectrum
of senior residential choices, care options and life enrichment
programs that fulfill individual needs and promote purposeful
living throughout the aging process. Its experts provide insights
on senior living, care, wellness, brain health, caregiving and
family topics at www.emeritus.com, which also offers details on the
organization's services. Emeritus' common stock is traded on the
New York Stock Exchange under the symbol ESC.
Safe Harbor
Certain items in this press release and statements made by or on
behalf of Brookdale Senior Living Inc. and Emeritus Corporation
relating hereto (including statements with respect to the merger of
Brookdale and Emeritus) may
constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Those
forward-looking statements are subject to various risks and
uncertainties. Forward-looking statements are generally
identifiable by use of forward-looking terminology such as "may,"
"will," "should," "potential," "intend," "expect," "endeavor,"
"seek," "anticipate," "estimate," "overestimate," "underestimate,"
"believe," "could," "would," "project," "predict," "continue,"
"plan" or other similar words or expressions. Although we believe
the expectations reflected in any forward-looking statements are
based on reasonable assumptions, we can give no assurance that our
expectations will be attained and actual results could differ
materially from those projected. Factors which could have a
material adverse effect on our operations and future prospects or
which could cause events or circumstances to differ from the
forward-looking statements include, but are not limited to, the
risk associated with the current global economic situation and its
impact upon capital markets and liquidity; changes in governmental
reimbursement programs; our inability to extend (or refinance) debt
(including our credit and letter of credit facilities) as it
matures; the risk that we may not be able to satisfy the conditions
precedent to exercising the extension options associated with
certain of our debt agreements; events which adversely affect the
ability of seniors to afford our monthly resident fees or entrance
fees; the conditions of housing markets in certain geographic
areas; our ability to generate sufficient cash flow to cover
required interest and long-term operating lease payments; the
effect of our indebtedness and long-term operating leases on our
liquidity; the risk of loss of property pursuant to our mortgage
debt and long-term lease obligations; the possibilities that
changes in the capital markets, including changes in interest rates
and/or credit spreads, or other factors could make financing more
expensive or unavailable to us; our determination from time to time
to purchase any shares under the repurchase program; our ability to
fund any repurchases; our ability to effectively manage our growth;
our ability to maintain consistent quality control; delays in
obtaining regulatory approvals; the risk that we may not be able to
expand, redevelop and reposition our communities in accordance with
our plans; our ability to complete acquisitions and integrate them
into our operations; competition for the acquisition of assets; our
ability to obtain additional capital on terms acceptable to us; a
decrease in the overall demand for senior housing; our
vulnerability to economic downturns; acts of nature in certain
geographic areas; terminations of our resident agreements and
vacancies in the living spaces we lease; early terminations or
non-renewal of management agreements; increased competition for
skilled personnel; increased union activity; departure of our key
officers; increases in market interest rates; environmental
contamination at any of our facilities; failure to comply with
existing environmental laws; an adverse determination or resolution
of complaints filed against us; the cost and difficulty of
complying with increasing and evolving regulation; risks relating
to the merger of Brookdale and
Emeritus, including in respect of the satisfaction of closing
conditions to the merger; unanticipated difficulties and/or
expenditures relating to the merger; the risk that regulatory
approvals required for the merger are not obtained or are obtained
subject to conditions that are not anticipated; uncertainties as to
the timing of the merger; litigation relating to the merger; the
impact of the transaction on each company's relationships with
residents, employees and third parties; and the inability to
obtain, or delays in obtaining cost savings and synergies from the
merger; as well as other risks detailed from time to time in our
filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K and Quarterly Reports on Form
10-Q. We expressly disclaim any obligation to release
publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in our expectations with
regard thereto or change in events, conditions or circumstances on
which any statement is based.
Additional Information and Where to Find It
In connection with the merger, Brookdale plans to file with the SEC a
Registration Statement on Form S-4 that will include a joint proxy
statement/prospectus, as well as other relevant documents
concerning the proposed transaction. EACH COMPANY'S STOCKHOLDERS
ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING
THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. A free copy of the joint proxy statement/prospectus
and other filings containing information about Brookdale and Emeritus Corporation may be
obtained at the SEC's Internet site (http://www.sec.gov). You will
also be able to obtain these documents, free of charge, from
Brookdale at www.brookdale.com
under the heading "About Brookdale / Investor Relations" or from
Emeritus Corporation at www.emeritus.com under the heading
"Investors."
Brookdale and Emeritus
Corporation and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies
from Brookdale's and Emeritus
Corporation's stockholders in connection with the merger.
Information about the directors and executive officers of
Brookdale and their ownership of
Brookdale common stock is set
forth in the proxy statement for Brookdale's 2013 annual meeting of
stockholders, as filed with the SEC on Schedule 14A on April 30, 2013. Information about the directors
and executive officers of Emeritus Corporation and their ownership
of Emeritus Corporation common stock is set forth in the proxy
statement for Emeritus Corporation's 2013 annual meeting of
stockholders, as filed with the SEC on Schedule 14A on April 9, 2013. Additional information
regarding the interests of those participants and other persons who
may be deemed participants in the merger may be obtained by reading
the joint proxy statement regarding the merger when it becomes
available. Free copies of this document may be obtained as
described in the preceding paragraph. This press release shall not
constitute an offer to sell or the solicitation of an offer to sell
or the solicitation of an offer to buy any securities, nor shall
there be any sale of securities in any jurisdiction in which such
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such
jurisdiction. No offer of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Brookdale Senior
Living
|
|
Combined Community
Statistics
|
|
As of
12/31/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brookdale
Pre-Acquisition
|
|
Emeritus
|
|
Brookdale
Post-Acquisition
|
|
|
|
Number of
Communities
|
Number of
Units
|
% of
Total
|
|
Number of
Communities
|
Number of
Units
|
|
Number of
Communities
|
Number of
Units
|
% of
Total
|
|
Ownership
Type
|
|
|
|
|
|
|
|
|
|
|
|
Owned
|
|
225
|
23,163
|
35%
|
|
186
|
15,279
|
|
411
|
38,442
|
34%
|
|
Leased
|
|
329
|
25,939
|
39%
|
|
311
|
29,413
|
|
640
|
55,352
|
49%
|
|
Managed
|
|
95
|
17,422
|
26%
|
|
15
|
1,478
|
|
110
|
18,900
|
17%
|
|
Total
|
|
649
|
66,524
|
100%
|
|
512
|
46,170
|
|
1,161
|
112,694
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mix By Care
Level
|
|
|
|
|
|
|
|
|
|
|
|
Independent Living -
Entry Fee
|
5,687
|
9%
|
|
|
-
|
|
|
5,687
|
5%
|
|
Independent Living -
Rental
|
|
22,349
|
34%
|
|
|
6,413
|
|
|
28,762
|
26%
|
|
Assisted
Living
|
|
27,481
|
41%
|
|
|
31,545
|
|
|
59,026
|
52%
|
|
Alzheimers'
Care
|
|
7,037
|
11%
|
|
|
7,018
|
|
|
14,055
|
12%
|
|
Skilled
Nursing
|
|
3,970
|
6%
|
|
|
1,194
|
|
|
5,164
|
5%
|
|
Total
|
|
|
66,524
|
100%
|
|
|
46,170
|
|
|
112,694
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Brookdale Senior Living Inc.