(Bloomberg) — Brookdale Senior Living Inc. (NYSE:BKD) has agreed to buy Emeritus Corp. (NYSE:ESC) for about $1.4 billion in stock, building a network of housing for the elderly across 46 U.S. states.
Investors in Seattle-based Emeritus will receive 0.95 shares of Brookdale for each share they own, the companies said in a statement yesterday. That values Emeritus at about $28.56 a share, a 33 percent premium to yesterday’s closing price. Including debt, the transaction is valued at about $2.8 billion.
The deal strengthens Brookdale’s platform as the country’s population ages and the number of residents living in senior- housing communities climbs. Brookdale, based in Brentwood, Tennessee, said the deal will create the “only national full- spectrum senior-living solutions company,” with more than 1,100 locations.
Emeritus has attracted attention in the private long-term care insurance (LTCI) community by helping to sponsor long-term care (LTC) planning awareness campaigns.
“This combination will improve our ability to deliver the best high-quality solutions for the growing demographic of aging seniors and their families,” Brookdale Chief Executive Officer Andy Smith said in the statement. “With still only 10 percent market share post-merger, we are confident of our prospects for driving further long-term revenue growth.”
The deal will increase Brookdale’s presence in high- population states in the West and Northeast, more than doubling its units in California, New York, New Jersey and Massachusetts.
The combined company’s properties will offer services including assisted living, dementia care, skilled nursing, outpatient therapy, home health and hospice care. The deal will expand Brookdale’s units by more than two-thirds to 112,700.
Smith will be CEO of the combined company. Emeritus CEO Granger Cobb will join the board and continue in a consulting role, the companies said.
Fortress Investment Group LLC, a New York-based private- equity firm, acquired Brookdale in 2000 and took the company public five years later. The firm remains Brookdale’s largest shareholder, with a stake of about 14 percent as of Dec. 31, according to data compiled by Bloomberg.
The acquisition is scheduled for completion in the third quarter, the companies said.
–Editors: Daniel Taub, Josh Friedman