Healthcare REIT buying spree grabs Sunrise Senior Living

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Mark Ordan
Mark Ordan
Health Care REIT Inc. will acquire Sunrise Senior Living for $844.6 million in cash, creating a mammoth senior living company that will send ripples through the sector.

The merger reflects a real estate value of about $1.9 billion. Under terms of the transaction, Health Care REIT said it is acquiring all of the outstanding common stock of Sunrise for $14.50 per share.

The companies are expected to close on the deal in the first half of 2013, pending shareholder approval.

The deal marked the latest acquisitions for the Toledo-based REIT, which has made 22 takeovers since the beginning of 2011. In a presentation, Health Care REIT said it expected a real estate pipeline of more than $2 billion to be realized over time by buying other interests from existing Sunrise joint venture partners. It will now have an average approximately 28% interest in the 105 joint venture properties, in addition to 20 wholly owned properties.

Despite a robust portfolio and remarkable turnaround in recent years, Sunrise lost $23.4 million in the past year.

Health Care REIT Chairman and CEO George L. Chapman says the acquisition reflects the company's intention to attract private pay seniors in affluent U.S. markets. He complimented Sunrise for being a leader. When the deal closes, Health Care REIT will have 58,000 units in the U.S., Canada and the United Kingdom.

“This transaction positions us to build on our collaborative, relationship based investment philosophy and benefit from the ongoing transformation of the sector,” Chapman said in a statement. “There are few opportunities to acquire assets of this quality in a transaction of this scale.”

Sunrise CEO Mark Ordan said in a statement that the company was pleased with the Health Care REIT acquisition. He told CNBC's Jim Kramer that he was optimistic about the future of the senior living sector.
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