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Brookdale Senior Living buys Emeritus

Nashville, Tenn. and Seattle, Wash., February 20, 2014 -- Brookdale Senior Living Inc. (NYSE: BKD) and Emeritus Corporation (NYSE: ESC) today announced the signing of a definitive merger agreement to create the first national senior living solutions company. The combined companies will serve the growing market for senior living solutions as the single branded provider operating the only nationwide network of senior living communities with fully integrated ancillary services across the continuum of care. Following the merger, a Brookdale community will be within 10 miles of 6.5 million seniors 80 years or older.

Under the agreement, Emeritus shareholders will receive 0.95 shares of Brookdale common stock in exchange for each share of their Emeritus common stock. Based on the closing price of each company’s common stock on February 19, 2014, this exchange ratio implies a 32% premium on Emeritus’ shares. The transaction value totals $2.8 billion, with the inclusion of $1.4 billion of Emeritus mortgage debt. The transaction is expected to have a neutral impact on Brookdale’s Cash From Facility Operations in the first year of combined operations, which will grow to exceed $0.40 per share of accretion for the third year. The transaction is expected to close in the third quarter of 2014.

Through this merger, Brookdale will offer consumers nationwide the most comprehensive continuum of care, which includes independent living, assisted living, dementia care, skilled nursing, outpatient therapy, home health and hospice care. The transaction will expand Brookdale’s unit capacity by more than two-thirds to a total of approximately 112,700 units in 1,161 communities in 46 states. The portfolio will be located in 330 markets, where 80% of the U. S. population is located.

Andy Smith, Brookdale’s Chief Executive Officer, said, “In an industry with very attractive long-term growth dynamics, this strategic merger creates the first national, predominantly private-pay based, senior living solutions company. This combination will improve our ability to deliver the best, high quality solutions for the growing demographic of aging seniors and their families.

“With still only 10% market share post-merger, we are confident of our prospects for driving further long-term revenue growth through organic expansion, while enhancing our position in a rapidly consolidating industry. In addition, we expect this combination to produce significant operating efficiencies and to enable further investment in the on-going improvement of our service delivery through associate training and education, physical enhancements to our communities, and refinement of our leading technology platform. We look forward to welcoming the Emeritus team members to Brookdale, as well as the Emeritus shareholders, who will own approximately 27% of post-merger Brookdale.”

Granger Cobb, President and Chief Executive Officer of Emeritus, said, “Both companies share many core strengths, but foremost is a resident-centric culture, with passionate, dedicated associates committed to providing a high level of customer service. Combining and maximizing the significant strengths of our two outstanding companies is certain to be of tremendous advantage in supporting our customers and their families as they face the challenges of aging. We are also pleased that Emeritus shareholders will realize compelling and immediate value, as well as the opportunity to participate in the upside potential inherent in this powerful combination.”

Transaction Benefits

• Significantly enlarges geographic coverage and density – The addition of Emeritus will expand Brookdale’s unit capacity by more than two-thirds, providing entry into 10 new states and significantly increasing the Company’s presence in many high-population states, especially in the west and northeast. Units will more than double in California, New York, Georgia, New Jersey, Washington and Massachusetts and increase by more than 25% in 13 of the country’s 15 most populous states.

• Produces positive accretion and enhances opportunities to increase operating efficiency – The merger is expected to produce ongoing opportunities to achieve economies of scale for purchases of items such as insurance, food and benefits and to improve leverage of general and administrative expenses.

• Builds Brookdale’s real estate portfolio – Creates one of the largest owned senior housing real estate portfolios in the country. Additionally, with over 1,100 communities post-merger, Brookdale expects to continue earning a strong return on its investment in portfolio expansion and repositionings through its redevelopment program, named Program Max.

• Expands potential for ancillary service growth – The combination will enable Brookdale to expand its therapy, home health and hospice ancillary programs into Emeritus communities and accelerate the introduction of Emeritus’ Nurse on Call home health services into Brookdale’s major markets.

• Strengthens the brand – Consistent with Brookdale’s major branding initiative commenced in mid 2013, the larger national platform created by this transaction allows Brookdale to build brand awareness more efficiently and effectively, reaching more seniors and their families who can benefit from the Company’s services.


Andy Smith will serve as Chief Executive Officer and Mark Ohlendorf as President and Chief Financial Officer of the combined company. It is anticipated that certain members of Emeritus’ senior management team will continue in senior positions after the merger. It is also anticipated that Granger Cobb will be joining Brookdale’s Board of Directors, and will continue in a consulting role with the company. The Company’s corporate headquarters will remain in Nashville.

Additional Information

The Boards of Directors of both Brookdale and Emeritus have unanimously approved the merger, which is expected to be completed in the third quarter of 2014, subject to receipt of regulatory approvals (including pursuant to the Hart-Scott-Rodino Antitrust Improvements Act) and shareholder approvals for each company, as well as other customary closing conditions.

BofA Merrill Lynch and CS Capital Advisors are serving as financial advisors to Brookdale and Skadden, Arps, Slate, Meagher & Flom LLP and Bass, Berry & Sims PLC are serving as its legal advisors. Wells Fargo Securities is serving as lead financial advisor, and Moelis & Company is also serving as financial advisor to provide an independent fairness opinion to Emeritus; Perkins Coie LLP is serving as Emeritus’ legal advisor.

More information on the transaction can be found at or

About Brookdale Senior Living

Brookdale Senior Living Inc. is a leading owner and operator of senior living communities throughout the United States. The Company is committed to providing senior living solutions within properties that are designed, purpose-built and operated to provide the highest-quality service, care and living accommodations for residents. Currently Brookdale operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 649 communities in 36 states and the ability to serve approximately 67,000 residents. Through its ancillary services program, the Company also offers a range of outpatient therapy, home health, personalized living and hospice services. Brookdale’s stock is traded on the New York Stock Exchange under the ticker symbol BKD.

About Emeritus

Emeritus Senior Living is the nation’s largest assisted living and memory care provider, with the ability to serve nearly 54,000 residents. Over 31,000 employees support more than 500 communities throughout 45 states coast to coast. Emeritus offers the spectrum of senior residential choices, care options and life enrichment programs that fulfill individual needs and promote purposeful living throughout the aging process. Its experts provide insights on senior living, care, wellness, brain health, caregiving and family topics at, which also offers details on the organization’s services. Emeritus’ common stock is traded on the New York Stock Exchange under the symbol ESC.



Brookdale Senior Living

Investors: Ross Roadman (615) 564-8104 Media: Julie Davis (615) 564-8225

Andrea Calise (212 521-4845

Emeritus Senior Living

Investors: Brad Cohen (206) 298-2909 Media: Liz Brady (646) 277-1226

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Thursday, February 20, 2014