Sienna Senior Living Inc. agreed to acquire a pair of Ontario retirement residences for about C$164 million and launched a roughly C$115 million bought-deal offering to partly fund the deal.
The properties include the six-story, 202-suite, 98%-occupied Waterford Retirement Residence Barrie on Edgehill Dr. in Barrie, which encompasses around 182,000 square feet; and the 182-suite, 80%-occupied Waterford Retirement Residence Kingston on Cataraqui Woods Dr. in Kingston, which comprises five stories and roughly 210,000 square feet.
The company expects the transaction, which represents an implied cap rate of roughly 6.0%, to be accretive to its operating funds from operations and adjusted FFO per common share on a leverage-neutral basis.
The bought-deal offering comprises 5,731,000 common shares at C$17.45 apiece, with a 30-day overallotment for the underwriters to acquire up to 859,650 additional common shares. Gross proceeds from the offering are expected to come to about C$115 million if the underwriters fully exercise the overallotment option.
TD Securities Inc. and BMO Capital Markets are leading the syndicate of underwriters for the offering.
Sienna plans to fund the property purchases and related transaction costs through the assumption of about C$62 million in existing mortgages, net proceeds from the bought-deal offering and up-financing of the existing debt or draws on its existing credit facilities.
The company expects to close the property purchases in the fourth quarter, while the bought-deal offering is set to close on or about Nov. 3.