This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Brookdale, Emeritus Create Senior Living Behemoth

NEW YORK (The Deal) -- Brookdale Senior Living (BKD)BKD and Emeritus (ESC)ESC are merging to create the first national senior living services company, with business in 46 states, the companies said Thursday.

The merger's transaction value totals $2.8 billion, and includes $1.4 billion of Seattle-based Emeritus mortgage debt.

Emeritus' shareholders will receive 0.95 shares of Brookdale common stock in exchange for each Emeritus share. This implied a 32% premium on Emeritus share price at closing Feb. 19.

Nashville-based Brookdale said the merger is expected to have a neutral impact on its cash from facility operations in the first year of combined operations, growing to exceed $0.40 per share of accretion for the third year. The parties said they expect the deal to close in the third quarter.

"In an industry with very attractive long-term growth dynamics, this strategic merger creates the first national, predominantly private-pay based, senior living solutions company," Brookdale CEO Andy Smith said in a statement. "This combination will improve our ability to deliver the best, high quality solutions for the growing demographic of aging seniors and their families."

Smith will become CEO of the merged company, with Mark Ohlendorf as president and chief financial officer. Granger Cobb, now CEO of Emeritus, will join the board and continue in a consulting role. Corporate headquarters will remain in Nashville.

Brookdale's unit capacity will expand by more than two-thirds, adding 10 states and boosting its presence in several high-population states, including California and New York.

It will create one of the largest owned senior housing real estate portfolios in the country, with more than 1,100 communities post-merger, Smith said.

Gray Hampton of Bank of America Merrill Lynch and Peter Pickette of CS Capital Advisors provided financial advice to Brookdale. Joseph Coco, Peter Serating, John Rayis, David Polster, Nancy Olson and Regina Olshan of Skadden, Arps, Slate, Meagher & Flom LLP provided legal advice, along with Bass, Berry & Sims PLC.

Emeritus advisers included Adam Berger and Kerr Robinson of Wells Fargo Securities as lead and Moelis & Co. LLC providing an independent fairness opinion from a team including Gregg Polle, Rich Harding, Ryan Bell and Suraj Tolani. The company received legal advice from a Perkins Coie LLP team which included partners Andrew Bor, David McShea and Chris Hall, counsel Stephanie Hirano and associates Elizabeth Breakstone and Sam Shaddox.

Emeritus' share price shot up 38.96% on the deal, trading at $29.82 midday in New York. Brookdale shares rose by 4.72%, trading midday at $31.51.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs