Erickson Retirement Communities (Erickson) announced last week that it has selected Redwood Capital Investments LLC as the successful bidder to acquire substantially all the assets of the company, subject to court approval. Erickson Retirement Communities received two qualified bids for the purchase of the company and the auction occurred on December 22, 2009 and specific terms of the bids were not disclosed. According to reports, an investment group led by New York private equity firm Kohlberg Kravis Roberts & Co. L.P. (KKR) was the other bidder. Redwood Capital and Erickson will submit an amended Plan and Disclosure Statement to the U.S. Bankruptcy Court in Dallas to request that the court schedule hearings to approve a revised disclosure statement and to confirm any plan of reorganization. Once that hearing has concluded, Erickson and Redwood Capital can begin the process of completing all necessary actions to finalize the sale.
“We are pleased that the interests of Redwood Capital are well aligned with Erickson’s long-term growth strategy and the interests of all community residents,” said John C. Erickson, founder and executive chairman of Erickson. “Redwood Capital has the capital resources to address Erickson’s long-term needs and has assured us they support the actions Erickson feels are necessary to strengthen the company immediately and for the future. This sale marks a company milestone that creates numerous benefits for all members of the Erickson Community.”