Sunwest Unitary Enterprise Signs Definitive Sales Agreement with Blackstone / Emeritus Joint Venture
$1.15 Billion Deal Involves 134 Sunwest Senior Living Properties
Portland, Ore. (Jan. 19, 2010) – Stayton SW Assisted Living, the consolidated Sunwest unitary enterprise (“Sunwest”), an Oregon-based senior living provider formerly known as Sunwest Management, announced that it has signed an agreement to recommend to the U.S. District Court to conditionally sell 134 senior housing facilities to a joint venture between an affiliate of Blackstone Real Estate Advisors VI L.P., Emeritus Senior Living, and Columbia Pacific Advisors, an entity controlled by Dan Baty, who is also chairman and Co-CEO of Emeritus (the “Blackstone / Emeritus Joint Venture”).
The transaction is valued at $1.15 billion and includes a combination of cash and assumption of debt. A motion to approve the sale agreement will be filed with the U.S. District Court in Eugene, Ore. If approved by the court, the Blackstone / Emeritus Joint Venture would be designated the lead, or “stalking horse,” bidder in a bankruptcy auction to be held later this year.
Emeritus Senior Living, one of the nation’s largest senior living providers, would manage the facilities. Existing Sunwest investors would have the opportunity to participate in the joint venture by rolling over up to $25 million in the equity portion of the deal.
Negotiations and diligence by the Blackstone / Emeritus Joint Venture began in August 2009 and involved resolving the restructuring terms of approximately $1 billion in debt held by 37 lenders. A large piece of that debt is controlled by affiliates of Columbia Pacific Advisors, including two loans totaling $290 million and covering 47 properties.
The agreement is subject to bankruptcy court approvals and finalization of loan modifications with the secured creditors. The bankruptcy court process also includes an open bidding period that would allow other qualified parties to bid on the portfolio. The Blackstone / Emeritus Joint Venture, as lead bidder, will have overbid protection and receive break-up fees if another bidder wins the sale.
The CRO and Receiver have filed a joint proposed plan of reorganization in Sunwest’s chapter 11 case that contemplates both a sale plan and a stand-alone plan. The plan of reorganization will be modified to reflect the stalking horse process and sale if so ordered by the court. If the court does not approve the sale, Sunwest will proceed with the standalone plan. A decision is expected in February.
About Sunwest Management
Founded in Oregon in 1991, Sunwest Management is one of the largest private senior living providers in the country and is a significant Oregon employer. The company engaged Clyde Hamstreet of Hamstreet & Associates in late November 2008 to serve as chief restructuring officer. After the SEC filed suit against the company, the U. S. District Court in Eugene, Oregon, entered an order on March 10, 2009, establishing a federal receivership and appointing Michael Grassmueck of The Grassmueck Group as receiver. Subsequently Sunwest has been reorganizing under the supervision of the court, the Receiver, and the CRO. For more information about Sunwest please visit: www.sunwestmanagement.com. For more information about Hamstreet & Associates please visit www.hamstreetandassociates.com. For more information about The Grassmueck Group, visit www.grassmueckgroup.com.
About The Blackstone Group
Blackstone is one of the world’s leading investment and advisory firms. Its alternative asset management businesses include the management of private equity funds, real estate funds, hedge funds, credit-oriented funds, collateralized loan obligation vehicles (CLOs) and closed-end mutual funds. The Blackstone Group also provides various financial advisory services, including mergers and acquisitions advisory, restructuring and reorganization advisory and fund placement services. Further information is available at www.blackstone.com.
About Emeritus Senior Living
Emeritus Corporation (NYSE:ESC) is a national provider of assisted living and Alzheimer’s and related dementia care services to seniors. Emeritus is a publicly traded company that currently operates 316 communities in 36 states representing capacity for approximately 27,500 units and approximately 32,700 residents. For more information, visit www.emeritus.com.
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