Private Equity Firm TPG to Buy ALC for About $278 Million

| February 26, 2013

Assisted Living Concepts, Inc. (NYSE:ALC), which operates 210 senior living residences in 20 states, announced today that it has agreed to be acquired by TPG, a global private investment firm.

Under the agreement, ALC stockholders will receive $12.00 in cash for each share of Class A common stock, and holders of Class B common stock will receive $12.90 in cash per share for a total of about $278 million, according to the number of shares the company had as of October 31, says Reuters.

The deal follows analyst speculation that the company would go private.

“We are very pleased with the transaction,” said Mel Rhinelander, chairman of the Special Committee, in a statement. “The acquisition represents a significant premium for our shareholders, and we also believe that TPG will help continue ALC’s focus on high quality service and care for our residents.”

Last year, Menomonee Falls-based ALC fired former CEO Laurie Bebo after the company faced increased scrutiny from regulators in several states where a series of violations were uncovered at a few of the company’s communities, some of which had below industry-average occupancy rates.

The company reported a net loss of $23.5 million, or $1.02 per share, for the first nine months of 2012. ALC also saw revenues drop 2.4% to $171.4 million during the first three quarters of 2012, compared to $175.6 million reported in the same period in 2011.

In May, the company hired retired lieutenant general Charles “Chip” Roadman to replace Bebo and lead the company. During his tenure, he hired around 800 additional employees and increased employee training as part of the turnaround effort, although he warned that the turnaround would likely take a few years. The company currently employs approximately 4,600 people.

Founded in 1992, TPG’s multi-continental influence commands $54.5 billion of assets under management and offices worldwide from U.S. and Asia, to Australia and South America. The firm’s investments span a variety of industries including healthcare, real estate and financial services, among others.

Citigroup Global Markets, Inc. acted as financial advisor to the Special Committee, and Cravath, Swaine & Moore LLP acted as independent legal counsel to the Special Committee. Goldman, Sachs & Co. acted as financial advisor to TPG, and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor to TPG.

Written by Jason Oliva


Companies: ,

Category: Senior Housing

Comments (1)

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  1. Chris_Foley says:

    It's good to see more money coming into the seniors housing M&A market. Assisted Living Concepts (ALC) is one of the few truly national providers and it is encouraging to see that they found investors who believe in the present & future of seniors housing and assisted living.
    Chris Foley
    Sr. V.P.
    Equity National Seniors Housing Brokerage & Advisors
    cfoley@Equity.net