Ventas, Inc. (NYSE:VTR) and its subsidiaries announced this week the acquisition of the remaining private equity interests in Atria, Inc. The transaction grants Ventas and Atria’s management team with 100% ownership in Atria, a senior living management company that currently manages a 118-property portfolio.
In the transaction, Ventas acquired 100% of various private investment funds previously managed by Lazard Frères Real Estate Investors LLC. The acquired funds now own a 34% interest in Atria and 3.7 million shares of Ventas common stock. The total purchase price was $242 million, granting Atria’s executives and employees with 66% ownership of Atria.
The acquisition amounts to total consideration valued at more than $3.1 billion as of the closing, making Ventas the largest owner of senior living communities in the U.S.
In 2011, Atria Senior Living merged its senior living portfolio with Ventas in an agreement that made Atria manager of the portfolio of 118 senior living communities.
Ventas acquired the portfolio through mergers of Atria Senior Living Group, Inc. (ASLG) using 25 million shares of common stock and $1.6 billion in cash and assumption of debt. Immediately prior to such mergers, Atria was spun-off to the stockholders of the acquired companies.
The former owners of Atria Senior Living Group and certain senior living communities formerly managed by Atria Senior Living Group are private equity funds managed by Lazard Real Estate Partners and affiliates. These funds own a majority interest in Atria, and Atria’s management team will become owners of the company as well. Atria’s chairman, Matthew J. Lustig, is expected to be appointed as a member of Ventas’ Board of Directors shortly after the deal closes.
Finalizing the transaction was a complicated process, noted John Moore, Atria’s CEO, due to the transaction’s structure and the portfolio’s location in high barrier-to-entry markets with complex regulatory frameworks.
Ventas welcomed the growth opportunity in further establishing the relationship with Atria.
“This acquisition establishes Ventas as the largest owner of senior living communities in the United States, and positions our company for substantial future growth,” said Ventas Chairman and CEO Debra Cafaro in a statement. “We are excited about the fact that our collaboration with Atria aligns us with a company that boasts an outstanding operations infrastructure, an experienced management team and employees who are committed to providing excellent care to the residents they serve.”
Written by Elizabeth Ecker