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Portfolio > Alternative Investments > Real Estate

Senior-housing companies rally after Amica agrees to buyout

By Katia Dmitrieva

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(Bloomberg) — Senior-housing companies in Canada rallied after Amica Mature Lifestyles Inc. agreed to be acquired by a pension fund-backed company, extending an industrywide consolidation.

Amica, a Vancouver-based provider of luxury seniors residences, surged to a record Wednesday after saying it will combine with BayBridge Seniors Housing Inc. BayBridge, backed by the Ontario Teachers’ Pension Plan, offered C$18.75 ($14.10) a share, more than double Tuesday’s closing price of C$8.79. Chartwell Retirement Residences, the largest operator of assisted-living homes across Canada, also rose.

“This is a really big positive mark on what these types of assets are worth,” Jimmy Shan, a real estate analyst at GMP Securities LP who covers both Amica and Chartwell, said by phone Wednesday. “Chartwell is the most comparable company. This confirms that Chartwell’s portfolio is worth more than people thought.”

Chartwell, based in Mississauga, Ontario, climbed 6.8 percent to C$12.34 at the close in Toronto. Amica jumped 111 percent to C$18.51, the highest closing price in the company’s history.

Aging Population

The proposed buyout of Amica is the latest in Canada’s health-care and senior real estate industry as property demand rises with an aging population. In June, a joint venture of Revera Inc. and Health Care REIT Inc., the largest U.S. retirement housing landlord, agreed to purchase Regal Lifestyle Communities Inc. Toledo, Ohio-based Health Care REIT also acquired Canada’s HealthLease Properties REIT in 2014.

Amica has 26 properties in Ontario, British Columbia and Alberta. BayBridge has 41 senior communities across Canada and the U.S., according to Wednesday’s statement.

“The combination of BayBridge and Amica will create Canada’s premier senior-living company,” Doug MacLatchy, chief executive officer of BayBridge, said in the statement.

Other companies that rallied Wednesday include senior- services provider Extendicare Inc., with a 5.1 percent gain, and nursing-home owner Sienna Senior Living Inc., up 3.2 percent.

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