"Upon closing of this transaction and satisfaction of the operating contingencies, we will have met our 2003 income goal for the sale/long-term manage back program," Sunrise chairman and CEO Paul Klaassen notes. "This transaction significantly accelerates our management services transformation by adding attractive long-term management contracts, reducing leverage, providing excess cash flow and increasing visibility for our 2003 earnings."
The multi-million-dollar deal involves 28 consolidated communities and 16 joint-venture properties, accounting for a total resident capacity of nearly 3,500. In terms of the transaction's financial ramifications, Sunrise will see $167 million in income and a debt reduction totaling $203 million. When all is said and done the company will still be left in possession of a remaining 66 consolidated and leased communities, of which 34 are eligible for Sunrise's sale/long-term manage back program.
In March, Sunrise executed a similar deal involving 10 cottage-style assisted living properties in Minnesota. The company completed the sale/long-term manage back of the properties with a Wedum Foundation subsidiary in exchange for $19.2 million. And in December of last year, Sunrise made another sale/long-term manage back deal with Macquarie, in which Sunrise saw $170 million for 11 properties.
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