Last week, Ventas, Inc. (NYSE: VTR) announced that it executed an agreement to acquire the real estate assets of privately-owned Atria Senior Living Group for a total purchase price of $3.1 billion and will use 24.6 million shares of Ventas common stock, worth approximately $1.35 billion, $150 million in cash and the assumption or repayment of $1.6 billion of net debt. Atria, located in Louisville, Kentucky, is the fourth largest operator of assisted living properties in the United States. As part of the transaction, Atria will spin off its management company to continue to operate the assets sold to Ventas.
The acquisition includes 118 private pay seniors housing assets located in markets including in the New York metropolitan area, New England, Boston and California. The portfolio to be acquired, which consists of 110 stable assets and eight redevelopment assets, contains approximately 13,500 units, with a median community size of 110 units, a median community age of 12 years and a current average occupancy rate exceeding 87 percent.
“The addition of 118 exceptional seniors housing assets in highly desirable locations will increase the portion of our net operating income (“NOI”) received from private pay assets to over two-thirds of our total NOI and will establish Ventas as the largest owner of seniors housing communities in the United States. Moreover, given the inherent growth in the portfolio, we expect that this transaction will improve Ventas’s growth rate,” Ventas Chairman, President and Chief Executive Officer Debra A. Cafaro said. “We are excited about this transaction with Atria, which is a highly respected operator known for its vibrant communities and its premier care to
Ventas believes that the portfolio will generate $640 million in revenues in 2011 and net operating income between $186 million and $196 million with an unleveraged NOI yield of approximately 6.5 percent on the 110 stabilized assets.
John A. Moore, Chief Executive Officer of Atria, said, “Creating this important business relationship with Ventas, which is respected for its outstanding performance, long track record of reliability and financial strength, and support for its operating partners, will benefit Atria as we grow our management business and continue to provide seniors with the highest quality care. Our employees have built an outstanding senior living company that has tremendous potential to expand. The transaction represents an excellent opportunity for Atria employees as well as the residents of our communities.”