Welltower (NYSE: HCN) and Revera Inc. announced Monday the completion of the previously announced acquisition of Regal Lifestyle Communities Inc. (TSX: RLC) through an existing 75/25 joint venture. The transaction comes in at C$12 per share in cash, a total enterprise value of about C$764 million, or $581.51 million in U.S. dollars.
The transaction was originally pegged at $623 million. The difference in transaction value is due to the fluctuation in the exchange rate, Alison Steeves, the director of external communications at Revera, told Senior Housing News.
The Regal portfolio includes 23 private-pay senior housing communities with more than 3,600 units. The portfolio is concentrated in major Canadian markets where Welltower [formerly known as Health Care REIT] and Revera have a substantial footprint. Specifically, there are 13 communities in Ontario, seven in Quebec, and one each in Saskatchewan, British Columbia and Newfoundland.
About 83% of the portfolio’s net operating income is derived in the cities of Montreal, Ottawa, Toronto and Vancouver. The initial cash yield is expected to be 6.1%.
Welltower and Revera entered into a joint venture in May 2013, when Welltower acquired 47 senior housing communities from Revera for C$1.34 billion. Including the acquisition of Regal, the JV is made up of 94 communities with gross investments totaling C$2.8 billion.
BMO Capital Markets and Brookfield Financial acted as financial advisors to Revera and Welltower. Goodmans LLP served as Welltower and Revera’s legal advisor. CIBC acted as financial advisor to Regal, and Stikeman Elliott LLP served as legal counsel to Regal.
Welltower and Revera also jointly own the Sunrise Senior Living management company, with Welltower owning a 24% interest and Revera owning a 76% interest.
Written by Mary Kate Nelson