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Originally published February 20, 2014 at 3:04 PM | Page modified February 20, 2014 at 8:48 PM

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Emeritus to be acquired by Brookdale for $ 1.4 B


Seattle Times business reporter

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A multibillion-dollar deal between two of the nation’s largest senior-living providers will leave Seattle with one less corporate headquarters.

Brookdale Senior Living, of Brentwood, Tenn., has agreed to buy Seattle-based Emeritus for about $1.4 billion in stock and $1.4 billion in assumed debt, expanding its network of housing for the elderly to 10 additional states and increasing its presence in populous parts of the West and Northeast.

Investors in Emeritus will receive 0.95 shares of Brookdale for each share they own, the companies said in a statement Thursday. That values Emeritus at about $28.56 a share, a 33 percent premium to Thursday’s closing price. Including debt, the transaction is valued at about $2.8 billion.

Founded in 1993, Emeritus employs about 300 people at its downtown Seattle headquarters near the Olympic Sculpture Park.

Emeritus CEO Granger Cobb will join the combined company’s board and continue in a consulting role.

Cobb said in a phone interview Thursday that both companies are in “the early stages of formulating an integration plan,” so the fate of Emeritus’ corporate staff is unclear.

“I anticipate that there will be consolidation of some functions over time, but again, that’s yet to be determined,” he said. “The earliest it might impact positions in the Seattle office would be late 2014, and well into 2015 for others.”

The deal is expected to close in the third quarter, pending shareholder and regulatory approval.

Brookdale said it will create the country’s “only national full-spectrum senior-living solutions company,” with more than 1,100 locations across 46 states. It also will more than double its units in California, New York, New Jersey and Massachusetts.

“This combination will improve our ability to deliver the best high-quality solutions for the growing demographic of aging seniors and their families,” Brookdale Chief Executive Officer Andy Smith said. “With still only 10 percent market share post-merger, we are confident of our prospects for driving further long-term revenue growth.”

Smith will be CEO of the combined company. The deal will expand Brookdale’s units by more than two-thirds to 112,700. Of those, 52 percent will be assisted-living units and 31 percent will be independent-living, with memory care and skilled nursing making up the rest.

Currently, 67 percent of Emeritus units are assisted-living and only 15 percent are independent-living.

“The geographic overlay is pretty similar. But Brookdale was concentrated on independent living, and we were a little heavier on assisted living,” Cobb said. “In addition, Brookdale has a pretty extensive rehabilitation program, and part of the plan is to roll that out to our communities.”

Cobb would not discuss how the deal came together, noting that those details will be disclosed in a forthcoming regulatory filing. He described the combination as “exciting,” even if it did take some employees aback, and said it would result in better and more-coordinated care.

“We’ve had employees who’ve been with us from the beginning. I do think there’s an element of shock in having to digest the news,” he said. “But they understand the benefits of combining our companies for the residents.”

Bloomberg News

contributed to this story.

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com. On Twitter: @amyemartinez



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