Brookdale Senior Living (NYSE: BKD) will soon have a new CEO. The nation’s largest senior living provider on Thursday announced changes to its executive and board leadership and the conclusion of a strategic review process that has been ongoing for about a year.
Lucinda Baier, currently CFO of Brentwood, Tennessee-based Brookdale, will assume the CEO position as of Feb. 28. At that time, current president and CEO T. Andrew Smith [pictured above] will step down from those positions, and from the board of directors.
In addition, Executive Chairman Daniel Decker will retire from the board of directors effective March 1. Lee S. Wielansky, a director since 2015, will assume the role of non-executive chairman.
The leadership change comes at the end of a strategic review process that involved exploring “multiple options and alternatives” for creating shareholder value, the company announced Thursday. Most recently, Brookdale was considering a conditional indication of interest from a buyer offering $9 per share in cash, or $11 per share in cash if certain conditions were met.
“The board did not believe this indication of interest was acceptable given the Board’s view of the value of the company and its assets, and the board’s belief that the company can ultimately create more value for shareholders by executing a turnaround strategy as a public company under new leadership,” Brookdale stated in a press release. “As a result, the board has concluded the formal strategic review process but remains committed to continuously evaluating all opportunities to enhance shareholder value.”
Smith era ends
Outgoing CEO Andy Smith first joined Brookdale in 2006, and served as executive vice president, general counsel and secretary prior to becoming CEO in February 2013. He also took on the president title in early March 2016 as the result of C-suite changes that led to the company’s former president Mark Ohlendorf stepping down.
As CEO, he has seen Brookdale through a tumultuous period following the company’s acquisition of rival Emeritus Corp. in 2014.
The Emeritus deal, which represented the largest merger in the industry’s history, was announced in February 2014 and completed in July of that year. It created a senior living giant responsible for operating more than 1,100 communities in 46 states and covering roughly 80% of the U.S. population. At the time, its executives touted the “incredible scale” the merger would bring to the company.
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But within several months of the deal closing, Brookdale cited integration challenges during its quarterly earnings call, which executives said led to lower-than-expected occupancy and lackluster performance for the company.
In 2016, the company began to receive pressure from activist shareholders to spin off its real estate into a REIT in order to unlock the intrinsic value of its stock. Early last year, takeover rumors emerged, involving the acquisition of the company, in whole or in part, by a private equity firm. Brookdale confirmed it was looking at strategic alternatives, and in the months since, deals with various parties have been rumored.
The CEO departure also is just the latest in a series of personnel moves for the company to help right its course following the massive merger. In November 2015, Brookdale tapped a former Walmart executive to come on board as COO. The March 2016 shakeup that saw Ohlendorf make his departure also ushered out Kristin Ferge, the company’s executive vice president and former chief accounting officer and treasurer.
The company also launched an internal and external branding effort, which included a national advertising campaign with the goal of “redefining senior living.”
Redefining senior living by having a successful national provider with enormous reach and brand power was a major goal for Smith and Brookdale as a whole after the Emeritus acquisition. The company now will continue to pursue that objective with Baier at the helm.
Baier joined Brookdale as CFO in 2015. Her previous roles include serving as the Senior Vice President and General Manager of Sears, Roebuck and Co.’s Credit and Financial Products business, serving as the Chairman of Sears National Bank, and serving on the Board of Directors for The Bon-Ton Stores and KKBS Group Holdings, LLC. She has been CFO of Navigant Consulting, Central Parking System, and other large organizations.
“As baby boomers continue to age and the industry rebounds over time, Brookdale will be well-positioned to return to growth and capture new opportunities,” Baier stated in Thursday’s press release. “In 2018, we plan to further cut G&A expenses, enhance our real estate portfolio strategy and shift our efforts to winning locally while leveraging our industry-leading scale. I look forward to working closely with the Board and management team to execute on a range of initiatives that I believe will create sustainable value for shareholders.”
Written by Tim Mullaney