(Bloomberg) — Capital Senior Living Corp., an operator of communities for the elderly, may be an attractive consolation prize for buyers that missed out on the industry’s latest takeover.
Brookdale Senior Living Inc.’s $1.4 billion purchase of Emeritus Corp. announced last week followed acquisitions of Sunrise Senior Living Inc. and Assisted Living Concepts Inc. in 2013.
While other suitors may emerge for Emeritus, the deal will likely close, Stephens Inc. said. That leaves Capital Senior, which jumped 7.4 percent after the Emeritus deal, as a takeover candidate, said Jeffrey Langbaum of Bloomberg Industries.
Private-equity firms and health-care real estate investment trusts (REITs) have been buying senior communities as a growing elderly population and improving economy lift demand. Capital Senior is forecast to boost revenue almost twice as fast as Emeritus in the next two years, according to data compiled by Bloomberg. The $713 million company could fetch at least a 21 percent premium from possible suitors Health Care REIT Inc. or Ventas Inc., eyeing the real estate Capital Senior owns, JMP Group Inc. said.
“The senior housing sector is pretty hot these days,” Rob Mains, a Saratoga Springs, New York-based analyst at Stifel Financial Corp., said in a phone interview. “Capital Senior is a well-run company that anyone wanting to get scale in senior housing would be interested in.”
Ralph Beattie, chief financial officer of Dallas-based Capital Senior, didn’t respond to requests for comment on whether his company would be open to a sale.
Brookdale agreed to buy Emeritus to add to its senior- living locations in California, New York, New Jersey and Massachusetts.