Seattle-based Emeritus was the winning bidder in Alterra's bankruptcy proceedings auction, which took place 10 days ago. Its bid was approved last week by the Bankruptcy Court. Emeritus says the fourth quarter closing allows time for Alterra to complete its restructuring and emerge from its Chapter 11 bankruptcy proceedings.
Alterra, which filed a voluntary Chapter 11 bankruptcy petition on Jan. 22, 2003, operates assisted living facilities in 24 states. Emeritus is one of the largest developers and operators of freestanding assisted living communities throughout the United States.
The acquisition is being made by an entity of Emeritus using capital from an affiliate of Fortress Investment Group LLC. The total consideration for the acquisition is $76 million. Emeritus has guaranteed $6.9 million of such closing consideration.
Alterra is expected to emerge from bankruptcy with about 300 communities containing room for 13,000 residents. When folded into Emeritus, Emeritus will operate about 475 communities, comprised of 26,500 units in 38 states, and generate annual operating revenue of about $800 million.
Emeritus' share price rose from $3.90 at close of markets on Friday, July 18 to $5.25 at close of markets on Friday, July 25. Its share price is up 38% over the past 52 weeks and up 18% compared to the S&P 500. The company's 52-week high share price, $5.85, dates back to Dec. 30, 2002. Its 52-week low of $1.60 dates back to Sept. 16, 2002.
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