The publicly traded REIT Ventas (NYSE: VTR) has announced a deal for New Senior Investment Group (NYSE: SNR), a real estate investment trust with a portfolio of 103 senior housing properties and 12,404 total units, the vast majority being independent living, located across 36 states. SNR was spun off from Newcastle Investment Corp. in November 2014. Major operating tenants/managers include Holiday Retirement (65 properties), Atria (21) and others including Grace Management, Merrill Gardens, Hawthorn Senior Living and Watermark Retirement Communities.
The total purchase price, including assumed debt of $1.5 million, comes to $2.3 billion, or about $185,400 per unit. Under the terms of the agreement, SNR shareholders will receive 0.1561 shares of newly issued VTR stock per share of SNR common stock. Based on the closing price of Ventas common stock on June 25, 2021, this represents a 31% equity premium based on SNR’s 30-day trading average.
Based on first-quarter annualized NOI the cap rate comes to 5.3%, based on projected 2022 it is 6%. The transaction is expected to be about $0.09 to $0.11 accretive to Venta’s normalized FFO per share on a full-year basis. The deal is expected to close in the second half of 2021.
Centerview Partners LLC is serving as financial advisor and Wachtell, Lipton, Rosen & Katz is acting as legal advisor to Ventas. Morgan Stanley & Co. LLC is serving as financial advisor and Cravath, Swaine & Moore LLP is acting as legal advisor to New Senior.
