Louisville, Kentucky-based real-estate investment trust Ventas Inc. will acquire the real-estate assets of Atria Senior Living Group in a deal valued at $1.5 billion.
The purchase will make Ventas the largest owner of senior housing communities in the United States. The company will pay $150 million in cash and 25 million common shares, valued at $1.35 billion, to acquire 118 senior housing communities from Atria, which is also based in Louisville, Kentucky.
Ventas will also assume the liability of Atria's net debt, which is currently estimated at $1.6 billion.
The company will become the owner of up to 35,000 senior housing units spread across 350 properties in the U.S. after completion of the deal. It expects to see a rise of up to $640 million in revenues in 2011 and is also hoping that it will add the earnings to its 2012 normalized funds from operations per share. The acquisition is expected to increase Ventas' net operating income by high-single-digits percent on annual basis.
Atria Senior Living is the fourth largest operator of assisted living properties in the U.S. and is currently owned by private-equity funds managed by Lazard Real Estate Partners. The assets are mostly located in the wealthy metropolitan areas and coastal communities of New York, New England and California. The company is expecting to spend around $230,000 per unit after the acquisition.
The news caused a rally in Ventas' shares as they closed at $54.75 on the New York Stock Exchange, showing a 6 percent increase.
The deal is expected to close in the first half of 2011.
