Ventas (VTR), Management Acquire All of Atria Senior Living
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Price: $43.61 +0.11%
Revenue Growth %: +7.4%
Financial Fact:
Net income attributable to common stockholders: 0.42
Today's EPS Names:
NLY, CP, RUSHA, More
Revenue Growth %: +7.4%
Financial Fact:
Net income attributable to common stockholders: 0.42
Today's EPS Names:
NLY, CP, RUSHA, More
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Ventas, Inc. (NYSE: VTR) executed a transaction whereby Ventas and the management team of Atria Senior Living, Inc. (“Atria”) own 100 percent of Atria, effective December 21. Atria’s Chairman and Chief Executive Officer John A. Moore will continue to lead Atria, one of the nation’s premier providers of senior living care services.
In the transaction, Ventas acquired 100 percent of various private investment funds (the “Funds”) previously managed by Lazard Frères Real Estate Investors LLC (“LFREI”) or its affiliates. The acquired Funds now own (a) a 34 percent interest in Atria and (b) 3.7 million shares of Ventas common stock. The total purchase price for these interests was approximately $242 million. Atria’s executives and employees, including Moore, now own 66 percent of Atria.
The transaction terms imply that the Company bought its shares of common stock at a discount to the December 20 closing price of $64.69. In addition, Ventas obtained certain rights and minority protections regarding material transactions affecting Atria and is entitled to two seats on the Atria Board of Directors. The base management fee under Ventas’s management arrangements with Atria will remain at five percent of revenues. At year end, Atria is expected to have approximately $30 million cash on hand.
In the transaction, Ventas also extinguished its obligation related to the “Earnout,” a contingent performance-based payment arising out of Ventas’s 2011 acquisition of 117 Atria-managed senior living communities, for an additional $44 million. This amount represents the discounted present value of the potential future payment, which was reflected on Ventas’s financial statements as a liability.
Atria remains the same corporate and licensed entity and will continue to manage for Ventas a portfolio of 118 high-quality, private pay senior living communities containing approximately 13,600 units that are located in major metropolitan markets with strong wealth demographics.
The transaction is expected to be minimally accretive to Ventas’s 2013 normalized funds from operations (FFO) per share. The 3.7 million shares of Ventas common stock remain in the Funds, but will be considered treasury shares and excluded from Ventas’s outstanding shares for purposes of calculating its earnings per share under generally accepted accounting principles (GAAP) and normalized FFO per share.
In the transaction, Ventas acquired 100 percent of various private investment funds (the “Funds”) previously managed by Lazard Frères Real Estate Investors LLC (“LFREI”) or its affiliates. The acquired Funds now own (a) a 34 percent interest in Atria and (b) 3.7 million shares of Ventas common stock. The total purchase price for these interests was approximately $242 million. Atria’s executives and employees, including Moore, now own 66 percent of Atria.
The transaction terms imply that the Company bought its shares of common stock at a discount to the December 20 closing price of $64.69. In addition, Ventas obtained certain rights and minority protections regarding material transactions affecting Atria and is entitled to two seats on the Atria Board of Directors. The base management fee under Ventas’s management arrangements with Atria will remain at five percent of revenues. At year end, Atria is expected to have approximately $30 million cash on hand.
In the transaction, Ventas also extinguished its obligation related to the “Earnout,” a contingent performance-based payment arising out of Ventas’s 2011 acquisition of 117 Atria-managed senior living communities, for an additional $44 million. This amount represents the discounted present value of the potential future payment, which was reflected on Ventas’s financial statements as a liability.
Atria remains the same corporate and licensed entity and will continue to manage for Ventas a portfolio of 118 high-quality, private pay senior living communities containing approximately 13,600 units that are located in major metropolitan markets with strong wealth demographics.
The transaction is expected to be minimally accretive to Ventas’s 2013 normalized funds from operations (FFO) per share. The 3.7 million shares of Ventas common stock remain in the Funds, but will be considered treasury shares and excluded from Ventas’s outstanding shares for purposes of calculating its earnings per share under generally accepted accounting principles (GAAP) and normalized FFO per share.
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