Ventas Inc to acquire Atria Senior Living Group for $1.5 billion

Healthcare real estate investment trust Ventas Inc, which operates health-care and senior living facilities, today said that it will pay $1.5 billion in stock and cash for the real-estate assets of Atria Senior Living Group.

Ventas will also assume $1.6-billion in debt taking the total transaction value to $3.1 billion.

Under the terms of the deal, Ventas will pay 24.96 million shares, worth about $1.35 billion, and $150 million in cash. It expects the assets to generate approximately $640 million in revenues in 2011 and net operating income to range between $186 million and $196 million.

Louisville, Kentucky-based Atria is the fourth-largest operator of assisted living properties in the US and owned by private equity funds managed by Lazard Real Estate Partners.

Prior to closing, Atria will spin off its management company Atria Management Co, which will continue to operate the assets under a management contract with Ventas.

Ventas will acquire from Atria 118 high-quality, private pay seniors housing assets located in markets with strong wealth demographics, including in the New York metropolitan area, New England, Boston and California.

The portfolio to be acquired, which consists of 110 stable assets and eight redevelopment assets, contains approximately 13,500 units, with a community size of 110 units, a community age of 12 years and a current average occupancy rate exceeding 87 per cent, said Ventas in a statement.

"The addition of 118 exceptional seniors housing assets in highly desirable locations will increase the portion of our net operating income and will establish Ventas as the largest owner of seniors housing communities in the US, said Ventas chairman, president and CEO Debra Cafaro.