Many octogenarians will not have to travel far to find senior living housing after the merger of two of the country’s leading elder care companies.
Brookdale Senior Living and Emeritus Corporation announced on Thursday that they would merge in a deal valued at $2.8 billion, including about $1.4 billion of Emeritus mortgage debt.
After the merger, 6.5 million people 80 years or older will live within 10 miles of a Brookdale community, according to the announcement.
Company executives expect $45 million in annual cost savings from the deal, and they noted the expanded real estate portfolio of more than 1,100 assisted living communities.
The companies also want to take advantage of what they say will be $4.5 billion in annual health care expenditures from their combined 100,000 residents.
“More people are seeking out senior living solutions than ever before,†said Granger Cobb, the president and chief executive of Emeritus.
Emeritus shareholders will swap each share of their common stock for .95 shares of Brookdale’s common stock. The deal is expected to close in the third quarter of 2014.
Based on each company’s closing share price on Wednesday, the deal represents a 32 percent premium on Emeritus’s stock, according to the companies’ announcement. Emeritus stock was up more than 30 percent in after-hours trading on Thursday. Brookdale’s stock remained nearly flat.
After the merger, Brookdale’s service offerings will include dementia care, skilled nursing and independent and assisted living in 46 states. Andy Smith, the current chief executive of Brookdale, will serve as the chief executive of the combined company.
“It is anticipated that certain members of Emeritus’ senior management team will continue in senior positions after the merger,†according to the announcement on Thursday.
Bank of America Merrill Lynch and CS Capital Advisors advised Brookdale, which received legal counsel from Skadden, Arps, Slate, Meagher & Flom and Bass, Berry & Sims. Wells Fargo and Moelis & Company served as financial advisers, while Perkins Coie provided legal advice.
