On Friday, news came that both company boards unanimously approved the acquisition. Brookdale executives today discussed the merger during the company's first quarter earnings call. William B. Doniger, vice chairman of Brookdale, commented that American Retirement Corp. is a great strategic fit for the company, "and this combination creates, in our opinion, the highest quality portfolio of senior housing assets in the United States," he said. "The successful expansion of American Retirement Corp.'s ancillary services business at our facilities represents significant upside to our future operating prospects."

During the company's first quarter, Brookdale completed the acquisition of 26 facilities for a total acquisition cost of $184.6 million. Subsequent to March 31, the company completed the acquisition of the Southern Assisted Living portfolio, which included 41 leased facilities with 2,887 units/beds; the first portion of the AEW portfolio, consisting of five owned facilities with 813 units/beds; and the Southland Portfolio, made up of four owned facilities with 262 units/beds.

Since Brookdale's IPO in November 2005, the company has purchased or committed to purchase $750.8 million in senior housing assets, representing 104 facilities and 9,147 units/beds. Brookdale's investment upon closing was approximately $315 million. To date, executives say $689 million in transactions--representing 92 facilities and 7,781 units/beds--have closed. Of the transactions, Brookdale invested $268 million of cash.

For the ARC purchase, Brookdale received a $1.3-billion equity commitment from an affiliate of Fortress Investment Group LLC, and retains the option to reduce the amount of equity commitment up to $650 million through the proceeds of debt or equity. Goldman, Sachs & Co. acted as financial adviser and Skadden, Arps, Slate, Meagher & Flom LLP acted as legal council to Brookdale, while Bear, Stearns & Co. Inc. provided an opinion to a special committee of the Brookdale board regarding the equity financing for the acquisition. Cohen & Steers Capital Advisors, LLC acted as financial adviser and Bass, Berry & Sims PLC acted as legal adviser to American Retirement Corp.

Brookdale's adjusted EBITDA during its first quarter was $26.9 million compared to $27 million in fourth quarter 2005. Funds from operations came in at $13.3 million, or 20 cents per share, compared to $10.9 million, or 17 cents per share, during the fourth quarter.

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Brookdale Takes ARC for $1B-Plus

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