(Adds CEO's comments from the conference call)
Feb 20 Brookdale Senior Living Inc said
it would buy Emeritus Corp for about $1.4 billion in an
all-stock deal, creating the largest owner-operator of senior
housing in the United States.
Brookdale will also assume $1.4 billion of Emeritus Corp's
The transaction will expand Brookdale's unit capacity by
more than two-thirds to a total of about 112,700 units in 1,161
The merger is expected to reduce operating expenses by up to
$45 million annually, said Brookdale CEO Andy Smith, who will be
the chief executive of the combined company.
Brookdale said it would offer 0.95 of its shares to each
Emeritus share held, at a premium of 32 percent to the closing
price of each company's stock on Feb. 19.
The offer translates into $28.41 per Emeritus share.
Emeritus shares rose 28 percent to $27.50 in extended
trading on Thursday.
Emeritus shareholders will own about 27 percent of the
The deal, which will provide Brookdale entry into 10 states,
is expected to be neutral on Brookdale's cash from facility
operations in the first year of combined operations.
CEO Smith said he expected the merger to generate $100
million of revenue in the third year, by expanding existing home
health and therapy services to Emeritus' markets.
The deal is expected to close in the third quarter of 2014.
Brookdale's shares closed at $30.09 on the New York Stock
Exchange, while Emeritus shares closed at $21.46.
(Reporting by Shailesh Kuber)