Healthcare real estate company Invesque Inc. agreed to acquire Commonwealth Senior Living LLC and 20 of its 24 private pay communities in Virginia and Pennsylvania for US$340.4 million.
The consideration to be paid to Commonwealth investors includes US$67.2 million of preferred interests in the Invesque vehicle that is acquiring the portfolio. Holders of the interests may exchange them for common shares of Invesque at US$9.75 apiece.
Located largely in Virginia, with one property in Pennsylvania, the 20 communities under contract comprise 1,440 independent living, assisted living and memory care units with 1,716 beds. Following the deal, Invesque will own 122 properties and 10,844 beds, valued at over US$1.8 billion, across 20 U.S. states and two Canadian provinces.
Invesque will also secure an exclusive right of first offer on three additional communities that Commonwealth will continue to manage. Commonwealth's senior management team will continue to manage and operate the portfolio.
Invesque will obtain about US$220 million of property-level mortgage financing to fund the deal, with the balance of the consideration to be paid using a draw on its revolving credit facility and cash on hand.
The acquisition is slated to close in the third quarter of 2019, subject to certain regulatory approvals, including the consent of the Toronto Stock Exchange, Invesque shareholders and other customary closing conditions.
BMO Capital Markets is acting as financial adviser to Invesque. Barack Ferrazzano Kirschbaum & Nagelberg LLP is serving as Invesque's primary legal counsel with help from Goodmans LLP and other law firms.
Houlihan Lokey Capital Inc. is Commonwealth's financial adviser in the deal, while Burr & Forman LLP is serving as its legal counsel.