Sunrise Senior Living to draw on loan for acquisition of assets from The Fountains

By Sara Rosenberg

New York, Jan. 19 - Sunrise Senior Living Inc. plans to use borrowings under its existing credit facility along with cash on hand to finance its portion of the proposed acquisition of management of 19 senior living communities, ownership of 18 of the communities, several undeveloped land parcels and certain other assets from The Fountains Continuum of Care Inc., according to a company news release.

The purchase price for the transaction is estimated to be $499 million plus $9 million in transaction costs for a total of $508 million, plus the assumption of $88.5 million in refundable entrance fee obligations.

Sunrise plans to enter into an agreement with a prospective capital partner so as the capital partner will acquire an 80% interest in the real estate associated with the 18 senior living communities by funding about $136 million of equity. Sunrise will fund the remaining approximately $34 million of equity. The balance of the purchase price is expected to be paid through a combination of seller financing and new financing to be obtained by the joint venture.

The portion of the purchase price related to the acquisition of the undeveloped land parcels, certain other assets, and the land parcel underlying the leased senior living community, is about $29 million.

Sunrise currently expects to pay a total of about $63 million for its portion of the entire transaction, with funding coming from the previously mentioned cash and credit facility availability.

Sunrise Senior Living is a McLean, Va.-based provider of senior living services.

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