) a leading health care real estate investment trust (REIT), has
recently accomplished a deal by which the company along
with the management team of Atria Senior Living, Inc. gained
complete ownership over Atria.
Ventas executed the deal through the acquisition of 100% of
several private investment funds formerly managed by Lazard
Frères Real Estate Investors LLC ('LFREI') or its affiliates.
Funds acquired now possess a 34% interest in Atria and 3.7
million shares of Ventas common stock. The amount required for
this purchase of interests was around $242 million. Notably,
executives and employees of Atria have a 66% stake in Atria.
Atria will carry on managing a portfolio of 118 private pay
senior living communities comprising around 13,600 units for
Ventas, which are situated in major metropolitan markets.
The Back Story
In May 2011, Ventas substantially acquired all of the real estate
assets and working capital of privately-owned Atria Senior Living
Group Inc. (ASLG). However, at that time, private equity funds
managed by LFREI or its affiliates owned ASLG.
Before the closing of the deal, ASLG spun off its management
operations to a newly formed entity named Atria Senior Living
Inc., which continued to be substantially owned and controlled by
LFREI or its affiliates. Post-acquisition, Atria continues to
manage these properties.
Ventas, primarily engaged in the business of financing, owning
and leasing healthcare related and senior housing facilities,
boasts one of the largest and most diversified portfolios in the
healthcare sector with exposure to all types of facilities.
The product diversity of the company allows it to capitalize on
opportunities in different markets based on individual market
dynamics, and provides a hard-to-replicate competitive advantage
over its peers. This recent transaction further creates
additional growth prospects.
Ventas received specific rights and minority protections
concerning material transactions impacting Atria and is permitted
two seats on Atria's board. Further, Ventas put an end to its
commitment related to the "Earnout," a contingent
performance-based payment that resulted from Ventas's 2011
acquisition of 117 Atria-managed senior living communities, for
an additional $44 million. However, this transaction is likely to
be minimally accretive to Ventas's 2013 normalized funds from
operations (FFO) per share.
Ventas currently retains a Zacks #2 Rank, which translates into a
short-term Buy rating. One of its competitors,
) currently retains a Zacks #3 Rank, which translates into a
short-term Hold rating.
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VENTAS INC (VTR): Free Stock Analysis Report
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