- Ventas (VTR -1.8%) and New Senior Investment (NYSE:SNR) entered into a definitive merger agreement post which the former will acquire the latter in an all-stock transaction worth ~$2.3B, including $1.5B of new senior debt.
- Under agreement terms, New Senior shareholders will receive 0.1561 shares of newly issued Ventas stock per share of New Senior common stock; June 25 closing price represents ~$9.1/new senior share indicating a 31% equity premium based on New Senior's 30-day trading average, and a 10% premium on New Senior’s total enterprise value.
- Transaction valuation is expected to represent ~6% capitalization rate on expected New Senior 2022 Net Operating Income, ~8% capitalization rate on estimated New Senior NOI over time and is expected to be ~$0.09 to $0.11 accretive to Ventas’s normalized FFO/share on FY basis.
- New Senior same-store occupancy gains have accelerated in June and the Q2 spot to spot occupancy change is expected to be toward the high-end of the 2Q21 guidance range of +120bps to +150bps sequentially.
- Transaction increases Ventas' exposure to the powerful recovery in Senior Housing:
- New Senior has a high-quality, geographically diversified portfolio of 103 private pay senior living communities, including 102 independent living communities, totaling 12,404 units and located across 36 states in U.S.
- Starting in 2022, Ventas expects to realize between $16 to $18M in annualized corporate G&A synergies.
- Transaction expected to close in 2H21.