DALLAS, TX - Capital Senior Living Corporation (the "Company") (NYSE:CSU), one of the country's largest operators of senior living communities, today announced that it has entered into a definitive agreement with Signature Assisted Living of Texas, LLC ("Signature") to acquire Signature's interests in 12 leases with Health Care REIT, Inc. (NYSE:HCN). The 12 leased communities are high-quality purpose-built assisted living and memory care facilities located in Texas. The transaction is expected to close in the third quarter of 2010, subject to further due diligence, customary closing conditions and approvals.
Source: Capital Senior Living Corporation
The Signature communities have approximately 677 units and include 532 units of assisted living and 145 units of memory care, with a combined capacity of 764 residents. The communities average less than three years of age. In June of this year, financial occupancy at the combined communities was approximately 91%. The twelve Signature communities will bring to 29 the total number of communities the Company operates in Texas.
"We believe this transaction is very strategic and will create tremendous value for our shareholders by increasing the Company's CFFO by approximately $2.3 million or $0.09 per share," said Lawrence A. Cohen, Chief Executive Officer of the Company. "Upon closing the transaction, the Company will operate a significantly larger platform in Texas and benefit from the clustering of communities. The portfolio is extremely complementary to our existing footprint and provides additional opportunities to achieve operating leverage and synergies. Furthermore, we are pleased to complete our third transaction with HCN and continue to strengthen our relationship."
Annualizing the 12 senior housing communities' revenues as of May 2010 yields approximately $30.3 million, with EBITDAR of approximately $13.5 million net of incremental general and administrative expenses. The annual payment due to HCN is expected to be $8.9 million. Consequently, EBITDAR is expected to exceed the annual cash payment due HCN by approximately $4.6 million.
The Company expects to begin consolidating the revenues and expenses of the twelve communities on its income statement, along with the additional expenses related to this transaction, in the third quarter of 2010, subject to lender and regulatory approvals and other customary closing conditions.
Capital Senior Living Corporation is one of the nation's largest operators of residential communities for senior adults. The Company's operating philosophy emphasizes a continuum of care, which integrates independent living, assisted living and home care services, to provide residents the opportunity to age in place. The Company currently operates 66 senior living communities in 23 states with an aggregate capacity of approximately 10,000 residents.