US healthcare real estate investment trust Ventas is expanding its senior housing portfolio with the acquisition of NYSE-listed peer New Senior Investment in a $2.3bn deal (€1.9bn).
According to a merger agreement reached by the companies, New Senior shareholders will receive 0.1561 shares of newly issued Ventas stock per share of New Senior common stock. The transaction, valued at approximately $2.3bn, includes $1.5bn of New Senior debt.
The companies said the deal values New Senior at a 10% premium to its total enterprise value.
New Senior owns a geographically diversified portfolio of 103 private-pay senior living communities, including 102 independent living communities, totalling 12,404 units and located across 36 US states.
Debra A Cafaro, Ventas chairman and CEO, said: “Building on the strong momentum we are experiencing in our business, we are delighted to announce this strategic and accretive acquisition with New Senior that expands Ventas’s position in senior housing at an important inflexion point in the cycle as the senior housing industry rebounds.”
Cafaro said the transaction provides Ventas shareholders with an attractive valuation and accretion, and further positions the business.
“It continues Ventas’s longstanding track record of capital allocation excellence, builds on our deep experience with the independent living product and leading operators Atria and Holiday, and is a testament to the continued dedication and expertise of our outstanding team,” Cafaro said.
J Justin Hutchens, Ventas’s EVP, senior housing, said: “These independent living communities represent a strong fit with our existing portfolio, as we enhance our senior housing business to capture upside from the industry recovery.
“New Senior’s independent living communities are located in advantaged markets, enjoy positive supply demand fundamentals, appeal to a large and growing middle market senior demographic, have demonstrated superior financial performance and are rapidly growing occupancy and leads.”
Susan L Givens, president and CEO of New Senior, said: “We are pleased to have reached this agreement with Ventas, which provides immediate, full and fair value to our shareholders.
“It was a pleasure to work with the focused and knowledgeable Ventas team. Our Board and management team have concluded that combining with Ventas will provide all of our stakeholders the opportunity to benefit from the upside potential of a combined company that has enhanced size, scale, relationships and financial strength.”
To read the digital edition of the latest IPE Real Assets magazine click here.