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SEATTLE-Emeritus Corp., a publicly held assisted living corporation, has closed on its $501-million acquisition of 41 properties from Health Care Property Investors. Locally based Emeritus previously leased 33 of the properties. The remaining properties are leased by Summerville Senior Living, Inc., which this spring agreed to be acquired by Emeritus for 8.5 million shares of Emeritus stock.

The 41 communities are spread across 17 states and comprise 3,732 units for assisted living, memory loss, and independent services to seniors. The acquisition was partially financed by Capmark Financial Inc. through mortgage debt of $302.9 million at a weighted average interest rate of 6.557%.

Emeritus currently operates, or has an interest in, 206 communities representing capacity for approximately 16,777 units and 20,441 residents in 34 states. Summerville operates 81 communities, with 7,935 units in 13 states providing independent living, assisted living and other services to seniors.

Emeritus’ share price has fallen approximately 28% since its acquisition of Summerville was announced in March. Emeritus share price was trading at around $30 per share immediately prior to the merger announcement. In noontime trading Thursday, Emeritus share price stood at $21.50. The company lost $14.

The proposed deal, scheduled to close on Sept. 1, will give Summerville shareholders about 31% of Emeritus’ outstanding stock. Summerville shareholders include Apollo Real Estate Investment Funds III and IV and certain employees of Summerville.

Upon completion of the merger, Summerville will be a wholly owned subsidiary of Emeritus Corp. and will retain the brand name in the operation of its communities. Summerville president/CEO Granger Cobb will assume the titles of president and co-CEO of Emeritus. A representative designated by the Apollo Funds and Granger Cobb will each have a seat on the board of directors of Emeritus.

Emeritus this month reported a net loss of $113.3 million during the first half of the year on revenue of $221.1 million. In addition to the HCPI acquisition and the Summerville merger, Emeritus has agreements in place to acquire an additional 11 properties that it does not already operate for approximately $94 million, according to SEC filings. The additional transactions are expected to close before the end of September. The largest of the lot, to be purchased for $88 million plus closing costs, is a portfolio of nine communities (711 units) in the state of New York that the company currently leases.

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