Real Estate Department Advises Sunrise Senior Living in $1.9 Billion Merger

September 5, 2012

Willkie assists Sunrise Senior Living, Inc. in its acquisition by Health Care REIT, Inc., as well as in several other significant transactions leading up to the merger.

On August 22, Willkie client Sunrise Senior Living, Inc. announced that it has entered into a definitive merger agreement under which Health Care REIT, Inc. will acquire all of the outstanding common stock of Sunrise for $14.50 per share in an all-cash transaction valued at $1.9 billion (including debt).  The merger is expected to create one of the largest owners of nursing homes in the United States, Canada and Britain.  Among the Willkie attorneys assisting Sunrise in connection with the real estate aspects of this matter were partners Eugene Pinover and David Drewes and associate Daniel Backer.

Simultaneously and in connection with the Sunrise/Health Care REIT merger, Willkie, within days leading up to the deal, also helped Sunrise sign up several additional purchase and sale agreements, pursuant to which Sunrise has agreed to buy out certain of its joint venture partners.

The first transaction involves Sunrise’s agreement to buy out its partners – a number of real estate private equity funds controlled by Morgan Stanley – from Dawn Limited Partnership, a joint venture that owns a portfolio of 17 senior care facilities located throughout the United Kingdom.  The gross asset value of this portfolio is in excess of £400 million pounds.  In connection with this buyout, Willkie is also actively working opposite the Bank of Scotland on a mortgage loan restructuring with respect to a portion of the portfolio.  This matter was handled by partners Eugene Pinover and David Drewes and associates Cindy Yellen and Adam Feit.

In a separate transaction, on August 21 Sunrise Senior Living Investments, Inc. entered into a purchase and sale agreement with HVP Sun Investor, LLC (Heitman) regarding a portfolio of 12 senior living facilities indirectly owned by Metropolitan Senior Housing LLC, Sunrise Lafayette Hills Assisted Living, L.P and Sunrise Paoli Assisted Living, L.P., a joint venture owned 25% by Sunrise and its affiliates and 75% by Heitman.  Pursuant to the purchase agreement, the purchaser will buy the Heitman Interest (as well as certain operating company subsidiaries wholly owned by Heitman) for a purchase price calculated based on an overall enterprise valuation of $340 million. Following closing, Sunrise and its affiliates will own 100% of the joint venture.

Also on August 21, Sunrise entered into a purchase and sale agreement with Heitman regarding a portfolio of 4 senior living facilities indirectly owned by Sunrise HBLR, LLC, a joint venture owned 20% by Sunrise and 80% by Heitman.  Pursuant to the purchase agreement, the purchaser will purchase the Heitman Interest (as well as certain operating company subsidiaries wholly owned by Heitman) for a purchase price calculated based on an overall enterprise valuation of $141 million.  Following closing, Sunrise and its affiliates will own 100% of the joint venture.  The Sunrise/Heitman transactions were handled by partner Eugene Pinover and associates Daniel Backer and Allan Wiesel.

Based in McLean, VA, Sunrise Senior Living, with approximately 31,600 employees, offers a full range of personalized senior living services, including independent living, assisted living, care for individuals with Alzheimer's and other forms of memory loss, as well as nursing and rehabilitative services.  As of June 30, 2012, the company operated 307 communities located in the United States, Canada and the United Kingdom, with a capacity of approximately 29,800 units.