Brookdale, Emeritus merger upends status quo, CEO says
Brookdale's Mark Ohlendorf will be president and CFO of the combined company.
Brookdale Senior Living is poised to become the largest senior living provider in the country, through a $2.8 billion acquisition of Seattle-based Emeritus Corp.
The deal is “transformative for the industry,” Brookdale CEO T. Andrew Smith said when announcing the deal in late February.
Under the definitive merger agreement, Emeritus shareholders will receive 0.95 shares of Brookdale common stock for each of their Emeritus shares, the companies stated. The deal is expected to close in the third quarter.
Based in Nashville, the expanded Brookdale will consist of more than 1,100 communities in 46 states, primarily catering to private-pay residents, executives said during a conference call about the acquisition.
The deal is aligned with Brookdale's recently launched marketing strategy, which is meant to position the company as the first truly national senior living brand, Smith noted on the conference call. He said the merger will make Brookdale the nation's first “single-branded provider” offering “fully integrated ancillary services across the continuum of care.”
While Brookdale touts its services across the full post-acute spectrum, independent and assisted living will be 83% of its product mix. Skilled nursing will account for 5%.
Emeritus was the subject of a scathing Frontline documentary last year. The report focused on allegations of poor care and legal judgments against the company.
Brookdale “looked deeply” into these issues and is satisfied that Emeritus is committed to providing high-quality care, Smith said.
The two providers share a similar “resident-centric” culture, said Emeritus President and CEO Granger Cobb.
Smith will be CEO after the merger, and Mark Ohlendorf will be CFO and president. Cobb will join the board of directors and will serve as a consultant to the company.