Capital Senior Living Corporation (the “Company”) (NYSE:CSU), one of the country’s largest operators of senior living communities, announced today that joint ventures in which it held a five percent partnership interest, have sold four senior living communities (the “Spring Meadows Communities”) to Health Care REIT, Inc. (NYSE:HCN). Upon closing the sale, the Company leased the communities from HCN. The Company previously managed the Spring Meadows Communities under long-term management agreements.
Highlights of this transaction include:
- Sales proceeds, including incentive distributions, total approximately $17.0 million, compared to the original investment of $1.3 million.
- Increases annual revenue by $26.0 million.
- Adds $12.2 million of EBITDAR.
- Additional CFFO of $0.7 million, or $0.03 per share.
- Incremental earnings of $1.9 million, or $0.07 per share.
“We are extremely pleased with the returns the Company and its joint venture partner received in this transaction,” commented Lawrence A. Cohen, Chief Executive Officer of the Company. “Proceeds from this transaction and our available cash will provide equity for direct acquisitions of senior living communities to strategically enhance the geographic concentration of our existing operating platform. We are actively pursuing a number of opportunities and are conducting due diligence on a few of the most attractive transactions. Furthermore, the addition of the Spring Meadows communities to our consolidated operations will provide immediate benefits to our shareholders. Along with a significant increase in our revenues, the lease will be accretive to cash flow and earnings. While we have been earning management fees on these communities, we will now be able to consolidate the results of operations and benefit fully from further improvement in occupancies, margins and cash flow. We are pleased to add the Spring Meadows communities to our strong and growing relationship with HCN.”