Friday, Sunrise Senior Living, Inc. (SRZ), a provider of personalized senior living services, said it has signed a deal to sell 21 wholly-owned assisted living communities to BLC Acquisitions Inc., an affiliate of Brookdale Senior Living Inc. (BKD) for $204 million.
The McLean, Virginia-based Sunrise Senior said the portfolio has a total of 1,389 units, comprised of 92 independent living units, 876 assisted living units and 421 Alzheimer's units.
The company noted that closing of the transaction, among other things, is subject to obtaining the requisite consent of the company's lenders under its bank credit facility by 5 pm on October 19 and is currently scheduled for November 16.
Sunrise Senior said BLC Acquisitions has placed into escrow an earnest money deposit of $5 million toward the purchase price.
At closing, Sunrise is expected to receive about $60 million in proceeds after payment or assumption by BLC Acquisitions of certain mortgage loans, the posting of required escrows, and payment of expenses by Sunrise, but prior to the use of any such funds to repay a portion of the outstanding amounts under Sunrise's bank credit facility.
Sunrise Living expects to take an impairment charge of about $7 million in the third quarter to write down five of the 21 communities to fair value. The Company expects to record a gain on the sale of real estate of about $50 million upon closing.
"This is another important step in our restructuring process and provides us with needed funds to pay down our bank line and with additional working capital," said Mark Ordan, Sunrise's chief executive officer in a statement.
Separately, senior living communities operator Brookdale Senior Living said the communities it has agreed to acquire are located in 11 states -- California, Colorado, Connecticut (2), Georgia, Indiana (4), Michigan, New Mexico, North Carolina, Ohio (6), Pennsylvania (2) and Virginia.
The company said many of the communities it is acquiring are in markets where it has either built or built or building a continuum net work. The company said 80% of the units are in markets were it can immediately serve with therapy and 55% with home health. It expects the deal to be accretive beginning 2010.
Brookdale expects to finance the deal with about $134 million of mortgage debt - substantially through the assumption of existing debt - with the balance to be paid from cash on hand. Closing is subject to the satisfaction of certain closing conditions and contingencies and the receipt of certain lender approvals.
Sunrise was advised on the sale by Goldman, Sachs and Co.
SRZ closed Thursday's regular trading at $3.30 and BKD at $19.06.
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