Attached files
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| 8-K - 8K JOINT VENTURE SNWST JAN 2010 - EMERITUS CORP\WA\ | jointventuresnwst8kjan2010.htm |
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NEWS
RELEASE
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For Immediate Release
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Contact:
Investor Relations
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(206)
298-2909
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EMERITUS
SIGNS JOINT VENTURE AGREEMENT TO ACQUIRE 134 SENIOR LIVING COMMUNITIES FOR $1.15
BILLION
Emeritus
to Manage the Portfolio
SEATTLE,
WA, January 19, 2010 -- Emeritus Corporation
(NYSE: ESC), a national provider of assisted living and Alzheimer’s care
services to seniors, today announced that it has entered into a joint venture
(“Joint Venture”) agreement with Blackstone Real Estate Advisors VI, L.P.
(“BREA”) and Columbia Pacific Advisors, (“Columbia Pacific”), an affiliate of
the Chairman and Co-CEO of Emeritus, in connection with the acquisition by the
Joint Venture of approximately 134 communities currently operated by an
affiliate of Sunwest Management (“Sunwest”), a Salem, Oregon-based operator of
senior living communities.
BREA will
have up to an 80% equity interest in the Joint Venture and Emeritus and Columbia
Pacific each will have up to a 10% equity interest in the Joint
Venture. The Joint Venture has entered into a purchase and sale
agreement to acquire the 134 communities from Sunwest for approximately $1.15
billion. The Joint Venture will post a $50 million purchase deposit
in conjunction with the signing. The purchase includes cash, the
assumption of secured debt, and the potential equity rollover of up to $25
million by the existing Sunwest investors.
In
conjunction with the proposed acquisition, Emeritus entered into an agreement
with the Joint Venture to manage the portfolio of communities for a fee equal to
5% of gross revenues. In addition, the Joint Venture agreement
contains provisions to allow Emeritus a right of first opportunity to purchase
the communities or the Joint Venture interests at fair value, and includes a
profit sharing provision for Emeritus if the Joint Venture’s internal rate of
return exceeds established thresholds.
Mr. Dan
Baty, Chairman and Co-CEO of Emeritus, said, “This represents an opportunity to
layer in our core product, within our geographic footprint in a structure with
Blackstone that has been successful for us in the past. We have spent
significant time and resources to understand the operational and physical
requirements of these communities so that we can efficiently integrate them into
our nationwide operating structure.”
The
purchase and sale agreement is subject to bankruptcy court approvals and
finalization of loan modifications with the secured creditors. The
bankruptcy court process also includes an open bidding period and process that
will allow other qualified parties to bid on the portfolio.
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ABOUT
THE COMPANY
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Emeritus
Corporation is a national provider of assisted living and Alzheimer’s and
related dementia care services to seniors. Emeritus is one of the
largest and most experienced operators of freestanding assisted living
communities located throughout the United States. These communities
provide a residential housing alternative for senior citizens who need
assistance with the activities of daily living, with an emphasis on personal
care services, which provides support to the residents in the aging
process. Emeritus currently operates 316 communities in 36 states
representing capacity for approximately 27,500 units and approximately 32,700
residents. Our common stock is traded on the New York Stock Exchange
under the symbol ESC, and our home page can be found on the Internet at
www.emeritus.com.
“Safe
Harbor” Statement under the Private Securities Litigation Reform Act of
1995: A number of the matters and subject areas discussed in this
report that are not historical or current facts deal with potential future
circumstances, operations, and prospects. The discussion of such
matters and subject areas is qualified by the inherent risks and uncertainties
surrounding future expectations generally, and also may materially differ from
our actual future experience as a result of such factors as the final closing of
the transaction contemplated herein and our ability to successfully incorporate
the new communities into our existing infrastructure. We have
attempted to identify, in context, certain of the factors that we currently
believe may cause actual future experience and results to differ from our
current expectations regarding the relevant matter or subject
area. These and other risks and uncertainties are detailed in our
reports filed with the Securities and Exchange Commission, including “Item 1A
Risk Factors” in our Annual Report on Form 10-K for the year ended December 31,
2008 and any subsequent Quarterly Report on Form 10Q. The Company
undertakes no obligation to update the information provided
herein.