NYSE-listed Sonida Senior Living is acquiring fellow US senior living communities investor CNL Healthcare Properties (CHP) in $1.8bn (€1.6bn) cash and stock transaction.
Sonida is acquiring CHP with 66% stock and 34% cash, to create a combined group with an equity market capitalisation of approximately $1.4bn and a total enterprise value of around $3bn once the transaction completes.
The transaction will be financed through a combination of cash provided by Conversant Capital and Sonida’s second largest shareholder, Silk Partners, as well as debt financing that has been committed by RBC Capital Markets and BMO Capital Markets.
Michael Simanovsky, founder and managing partner of Conversant Capital, will become the new board chairman following the completion of the transaction.
The combined company will have a portfolio of 153 owned independent living, assisted living and memory care senior living communities.
Brandon Ribar, president and CEO of Sonida Senior Living, said: “We are extremely pleased to announce this transformational deal, which will generate immediate per share earnings accretion and meaningful long-term value for all shareholders following closing.”
Ribar added that the deal is expected to immediately unlock “significant embedded synergies and NOI growth through portfolio optimisation while also deleveraging, increasing liquidity in our shares, and amplifying our access to capital”.
Stephen Mauldin, CEO, president and vice chairman of CNL Healthcare Properties, said: “This transaction culminates our focused strategic alternatives process and represents an exceptional outcome for CHP shareholders, residents and stakeholders. Since 2012, CHP has thoughtfully and successfully built and actively managed a leading private-pay senior housing business while providing exceptional care, services and value to our approximately 8,000 residents.
“Upon the closing of this transaction, our shareholders will receive a premium to the mid-point of our most recent estimated NAV per share range and the opportunity for full and real-time liquidity through their receipt of cash and unrestricted Sonida common stock.”
Simanovsky said: “With continued accelerating momentum, we are thrilled to increase our equity investment. This reflects our continued commitment to Sonida and confidence in the company and its management team’s ability to create value by executing on its strategy, including pursuing attractive acquisition opportunities amidst the highly compelling senior housing operating fundamentals.”
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