Dallas-based Sonida Senior Living announced Wednesday its acquisition of CNL Healthcare Properties in a $1.8 billion merger involving cash and stock.
CHP, a healthcare non-traded REIT headquartered in Orlando, will be folded into Sonida, which will be continued to be publicly traded on the NYSE with the ticker symbol “SNDA.” The combined company will own 14,700 units, making it the eighth largest owner of senior living assets in the nation.
Under terms of the agreement Sonida will pay the equivalent of $6.90 per CHP share, with 66 percent of compensation in the form of Sonida common shares and 34 percent in cash.
Financing for the deal is being provided by Conversant Capital and Silk Partners, Sonida’s second largest shareholder, through private placement of newly issued Sonida shares. RBC Capital Markets and BMO Capital Markets are providing debt financing. Newmark Group is advising on real estate.
KeyBanc Capital Partners is serving as exclusive financial advisor to CHP.
For outside legal counsel, Sonida general counsel Tabitha Bailey selected Fried, Frank, Harris, Shriver & Jacobson, with Sidley Austin serving as counsel to Sonida’s special committee.
CHP is represented by outside legal counsel Arnold & Porter Kaye Scholer and Ropes & Gray.
The combined company will own and operate a portfolio of 153 senior living centers owned featuring a mix of independent living, assisted living and memory care communities. As of June 30, CHP held 7,534 units in 70 investment properties over 26 states. The CHP properties complement Sonida’s own portfolio, but expands its presence, in particular, into the Mountain West and Pacific Northwest.
Sonida CEO Brandon Ribar says that beyond the possibilities of provided by synergies and net operating income, the acquisition is part of company efforts to capitalize on the tailwinds offered by a rapidly growing 80-plus population that desires independent living and will be in need of assisted living and memory care.
“This transaction represents an inflection point in our pursuit of that objective as it more than doubles Sonida’s number of owned units while deepening and expanding our exposure to the most attractive geographic areas for our strategy,”