Health Care REIT Inc. will acquire all of the outstanding common stock of Sunrise Senior Living Inc. for $14.50 per share in an all-cash transaction. The purchase price reflects a real estate value of $1.9 billion, of which $950 million will be paid in cash and the balance through the assumption of debt at an average interest rate of approximately 4.9%.
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Health Care REIT will acquire Sunrise’s 20 wholly owned seniors housing communities and Sunrise’s interest in joint ventures that own 105 seniors housing communities. The 20 wholly owned communities are located in the U.S. (17) and Canada (3), while the joint venture communities are located in the U.S. (78) and the United Kingdom (27).
The communities have a median age of eight years, and 90% of the communities are Sunrise’s "mansion" prototype. The portfolio is concentrated in New York, Los Angeles, San Francisco, Washington, D.C., Philadelphia, Boston, Chicago, and London. Approximately 50% of the properties are located in top five metropolitan statistical areas and 85% of the properties are in top 20 MSAs within their respective countries.
The acquisition includes a real estate pipeline of more than $2 billion that could be realized over time by purchasing additional interests from existing Sunrise joint venture partners.
At the time of acquisition, Health Care REIT expects to own on average an approximately 28% interest in the 105 joint venture communities. Of the 105 joint venture communities, 37 have purchase options that are exercisable in 2013, 13 have purchase options that are exercisable in 2014, and 21 are subject to open buy/sell rights that could result in Health Care REIT acquiring a 100% ownership interest.
Goldman Sachs and KeyBanc Capital Markets served as financial advisors for Health Care REIT, and Wachtell, Lipton, Rosen & Katz as legal advisor to Sunrise.
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