AlerisLife is being acquired by ABP Acquisition 2 LLC for almost $44 million, AlerisLife said Friday in filings with the Securities and Exchange Commission.
An agreement and merger plan were signed Thursday, according to the company. The transaction, which was unanimously recommended by a special committee of the AlerisLife Board of Directors and was approved by the full board, is expected to be completed in the first quarter.
ABP will acquire all of the outstanding shares of common stock of AlerisLife for $1.31 per share, which represents an 85% premium to the average trading price of the last 30 trading days of $0.71 per share. The total consideration to be paid to stockholders in the transaction is approximately $43.8 million, AlerisLife said.
ABP Acquisition 2 LLC is a wholly owned subsidiary of ABP Acquisition LLC. ABP Acquisition LLC is a wholly owned subsidiary of ABP Trust. Adam D. Portnoy, a managing director of AlerisLife and chair of the company’s board of directors, is the sole trustee and controlling shareholder, as well as an officer, of ABP Trust.
ABP Acquisition LLC, Portnoy and ABP Trust collectively currently own approximately 6.1% of the outstanding AlerisLife shares.
Portnoy also is president and CEO of RMR Group, which provides management services to AlerisLife and real estate investment trust Diversified Healthcare Trust, the portfolio of which contained 120 AlerisLife senior living communities operating under the Five Star Senior Living name as of November.
Diversified Healthcare Trust owns approximately 31.9% of the outstanding shares of AlerisLife and has agreed to the transaction and has agreed to tender the shares that it owns into the offer.
A news-filled 2022
News of the acquisition at the beginning of 2023 comes after a news-filled 2022 for AlerisLife:
- In January 2022, Five Star Senior Living announced a new name, AlerisLife, for a parent company under which the Five Star name would continue to be used for a senior living management services division and the Ageility name would continue to be used for its rehabilitation / fitness services division. AlerisLife also announced plans to expand into active adult management services and home care and concierge services.
- In February 2022, AlerisLife announced that it had closed on a $95 million senior secured term loan to obtain “increased liquidity to use at our discretion and additional flexibility for the coming years as we execute on our strategic business plan,” then-President and CEO Katie Potter said at the time.
- In May, AlerisLife announced that Potter had resigned and that Chief Financial Officer Jeff Leer had been appointed to succeed her on an interim basis as the company hired a consulting group to review operations.
- Leer’s appointment was made permanent in June as the company announced plans to cut costs and make operational changes to try to increase occupancy. In August, Leer said that AlerisLife would reduce costs by approximately $14 million and invest approximately $4 million under recommendations made by the consulting firm it had hired, to “drive efficiencies and standardize processes that will enable us to better serve our residents and customers and stabilize our financial performance.”
- In November, Leer said that continuing progress on the company’s restructuring plan had resulted in occupancy gains in the third quarter that were the largest in recent years.
- Also in November, AlerisLife reported that it faced possible delisting by Nasdaq because the bid price for shares of the company’s common stock had closed at less than $1 for the past 30 consecutive business days. The company was given until May 8, 2023, to come into compliance with the minimum bid price continued listing standard.
AlerisLife was No. 6 on the 2022 American Seniors Housing Association’s ASHA 50 list of largest senior living operators, falling from No. 5 in 2021 and No. 4 in 2020. But the company moved from No. 5 in 2021 to No. 4 in 2022 on Argentum’s list of largest operators.
Feb. 6, 2023: Read AlerisLife CEO: Becoming a private company will ‘enhance our focus’ on operations