Emeritus Signs Joint Venture Agreement to Acquire 134
Living Communities for $1.15 Billion
Emeritus to Manage the Portfolio
January 19, 2010 09:00 AM Eastern Time
SEATTLE--(EON: Enhanced Online News)--Emeritus Corporation (NYSE: ESC), a national provider of assisted living and Alzhei
services to seniors, today announced that it has entered into a joint venture (“Joint Venture”) agreement with Blackstone Real Estate
L.P. (“BREA”) and Columbia Pacific Advisors, (“Columbia Pacific”), an affiliate of the Chairman and Co-CEO of Emeritus, in con
acquisition by the Joint Venture of approximately 134 communities currently operated by an affiliate of Sunwest Management (“Sun
Oregon-based operator of senior living communities.
BREA will have up to an 80% equity interest in the Joint Venture and Emeritus and Columbia Pacific each will have up to a 10% eq
Joint Venture. The Joint Venture has entered into a purchase and sale agreement to acquire the 134 communities from Sunwest for
$1.15 billion. The Joint Venture will post a $50 million purchase deposit in conjunction with the signing. The purchase includes cash,
secured debt, and the potential equity rollover of up to $25 million by the existing Sunwest investors.
In conjunction with the proposed acquisition, Emeritus entered into an agreement with the Joint Venture to manage the portfolio of c
fee equal to 5% of gross revenues. In addition, the Joint Venture agreement contains provisions to allow Emeritus a right of first opp
purchase the communities or the Joint Venture interests at fair value, and includes a profit sharing provision for Emeritus if the Joint
rate of return exceeds established thresholds.
Mr. Dan Baty, Chairman and Co-CEO of Emeritus, said, “This represents an opportunity to layer in our core product, within our g
in a structure with Blackstone that has been successful for us in the past. We have spent significant time and resources to understand
and physical requirements of these communities so that we can efficiently integrate them i