Following an initial public offering (IPO), Big Rock Acquisition Corporation (Nasdaq: BRPAU) has its sights set on ultimately acquiring a large senior housing operator.
Florida-based senior housing owner and investor Big Rock Partners just completed the IPO for Big Rock Acquisition Corporation, a new special purpose acquisition corporation. It raised $69 million in the IPO. The company is targeting a total market capitalization between $200 million and $500 million.
The goal of the new company is to buy an existing senior housing operator and its owned real estate, Richard Ackerman, founding chairman and senior managing principal at Big Rock Partners, told Senior Housing News.
The firm that took BRPAU public is no stranger to the senior housing space. Big Rock Partners has been involved in a few senior living projects in recent years, including Atria at Villages of Windsor, as well as Windsor at Celebration, a senior living community to be operated by LCS in Celebration, Florida, upon its opening in spring 2018.
Lori Wittman, the former executive vice president and CFO of pure-play skilled nursing real estate investment trust (REIT) Care Capital Properties, now serves as Big Rock Partners’ treasurer and CFO. Care Capital Properties was a spin-off from Chicago-based REIT Ventas (NYSE: VTR), which is an equity partner in Atria at Villages of Windsor.
Ackerman named Des Moines, Iowa-based LCS or Louisville, Kentucky-based Atria Senior Living as the type of operator he has in mind to acquire through the new public entity—though he stated that Big Rock is not specifically targeting those companies, and that BRPAU will likely first acquire “a regional [player] … and then go from there.”
When it comes to being acquired, the time is right for many senior living operators, Ackerman suggested.
“At a lot of these companies, the managers or owners are ready to retire, and there’s no exit plan for them right now,” he explained.
All the while, senior housing providers are dealing with a “finite capital base,” as the “Big Three” health care real estate investment trusts (REITs)—Ventas, Welltower Inc. (NYSE: HCN) and HCP, Inc. (NYSE: HCP)—“can only provide so much capital for the industry,” Ackerman said.
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“We’re looking to provide a stable capital base for companies that don’t have it right now,” he explained.
Currently, BRPAU is looking to acquire senior housing companies that operate 20 to 50 buildings.
“The situation that we’re really looking for is an existing platform that already has in place the infrastructure to grow from that 50-building base,” Ackerman said.
As it stands, BRPAU is in a rather unique position.
“It’s kind of a groundbreaking situation for the industry because no one’s really done something like this before,” Ackerman said.
Written by Mary Kate Nelson