New pending acquisition of eight-asset senior
housing portfolio for $103 million to grow Sonida’s total senior
living operating portfolio to 91 communities
Raised $130 million in gross proceeds through
upsized public offering of common stock in August 2024 to fund
pending acquisitions
$150 million commitment on new senior secured
revolving credit facility to support growth
Sonida Senior Living, Inc. (“Sonida” or the “Company”) (NYSE:
SNDA), a leading owner, operator and investor in communities and
services for seniors, today provided a summary on its recent
capital markets activity and pending acquisitions.
“On the heels of strong second quarter operating results, which
demonstrated ongoing improvement across all key operating metrics,
I am equally pleased with the Company’s steady execution on both
its external accretive growth strategy and associated capital
markets initiatives,” said Brandon Ribar, President and Chief
Executive Officer. “Amidst historically favorable senior housing
trends, Sonida’s integrated and well-capitalized operating and
investment platform have positioned the Company to confidently
invest in high-quality, recently constructed communities at
attractive valuations. This strategy, coupled with continued
organic growth in our existing portfolio, can drive meaningful
value creation for the Company’s shareholders. We are very
appreciative of the support from our existing and new equity
shareholders and banking relationships, in addition to our
invaluable operating teams.”
Pending Acquisition
On August 15, 2024, Sonida announced that it is under contract
to acquire eight senior living communities strategically located in
attractive submarkets in the Southeast. This pending transaction
will further densify the Company’s footprint in northern Florida
and South Carolina and includes 555 units with Assisted Living
(“AL”) and Memory Care (“MC”) offerings (approximately 70% AL and
30% MC). The eight communities are located in high growth primary
and secondary metropolitan areas: Jacksonville, Orlando and Daytona
Beach (Florida); Hilton Head, Charleston and Florence (South
Carolina).
These communities will further modernize Sonida’s portfolio and
densify its presence in the Southeast, which will allow Sonida to
fully leverage its operating scale and drive efficiencies. The
eight-asset portfolio, with an attractive average asset age of 5
years, compares favorably to an average asset age of 19 years when
looking at comparable inventory within a 10-mile radius.
Sonida’s purchase price of $102.9 million, or approximately
$185,000 per unit, reflects a significant discount to the Company’s
estimate of replacement cost. The portfolio’s in-place occupancy is
approximately 83% with an average RevPOR of more than $6,000. The
Company anticipates that multi-year stabilization of net operating
income and margin should result in free cash flow and Net Asset
Value accretion in addition to the noted qualitative benefits to
the portfolio.
As of today, Sonida’s total operating portfolio is comprised of
83 communities, 13 of which Sonida manages on behalf of a
third-party and is inclusive of a new management contract that
closed in August 2024. Upon the closing of this acquisition, which
is targeted for late Q3 or early Q4, Sonida’s total operating
portfolio will grow to 91 communities.
For more information, please see the Company’s August 15, 2024
press release here.
Capital Markets Update – Public Equity
Offering
During August 2024, the Company raised $130.4 million in gross
proceeds from its offering of common equity. The Company initially
raised $110.4 million, net of underwriter discounts and offering
costs, as it closed on an underwritten public offering of 4,300,000
shares of its common stock, upsized from 4,000,000 shares at launch
on August 19, 2024. The price to the public of the offering was
$27.00 per share. As part of the offering, the Company granted the
underwriters a 30-day option to purchase up to an additional 15% of
the Company’s common shares. On August 22, 2024, underwriters
purchased an additional 530,317 shares for incremental proceeds of
$13.6 million, net of underwriter discounts and offering costs.
Conversant Capital, the Company’s largest shareholder, anchored the
raise, purchasing $50.0 million of shares in the public offering.
Sonida intends to use $102.9 million of the $124.0 million net
proceeds from the offering to fund the purchase price for the
pending acquisition of eight senior living communities described
above. The Company intends to use the remaining net proceeds from
the offering, including net proceeds from the underwriters’
exercise of their option to purchase additional shares, for other
general corporate purposes.
Morgan Stanley, RBC Capital Markets, LLC and BMO Capital Markets
acted as joint lead book-running managers of the offering.
For more information, please see the Company’s August 15, 2024,
press release here.
Capital Markets Update – New $150
Million Senior Secured Revolving Credit Facility
On July 24, 2024, the Company entered into a senior secured
revolving credit facility (the “Credit Facility”) with BMO Bank
N.A. (“BMO Bank”), as administrative agent and a lender. On August
12, 2024, the Company received a commitment letter from the Royal
Bank of Canada (“RBC”) pursuant to which RBC has committed to
provide a revolving credit commitment under the Credit Facility for
an additional amount of up to $75.0 million, which additional
commitment is subject to certain customary conditions, including
the negotiation and execution of definitive agreements acceptable
to Sonida, RBC and BMO Bank, and will result in an aggregate
commitment under our Credit Facility of up to $150.0 million. The
Credit Facility has a term of three years, a leverage-based pricing
matrix between S+210 and S+260 and is fully recourse to Sonida
Senior Living, Inc. and its applicable subsidiaries.
For more information, please see the Company’s prospectus
supplement filed with the Securities and Exchange Commission (SEC),
filed on August 15, 2024 here.
Loan Modification
On August 5, 2024, the Company entered into loan modification
agreements (“Texas Loan Modification”) with one of its lenders on
two owned communities in Texas. The original loan terms included
maturities of April 2025 and October 2031, as well as cross-default
provisions with each other. The Texas Loan Modification revised the
loan maturities to December 2025 on both communities and provides
the Company with an option to make a discounted payoff (“Texas
DPO”) of the outstanding loan principal on or prior to November 1,
2024. The Texas DPO amount of $18.5 million represents a discount
of 36% on the total principal outstanding of $28.7 million on these
two loans (as of July 31, 2024). The Texas Loan Modification
represents the last material restructuring of the Company’s debt
portfolio, with 58 of 60 loans having been addressed over the past
12 months.
Safe Harbor
The forward-looking statements in this press release, including,
but not limited to, statements relating to the Company’s
acquisitions, are subject to certain risks and uncertainties that
could cause the Company’s actual results and financial condition to
differ materially, including, but not limited to the Company’s
ability to recognize the anticipated benefits of such acquisitions;
the impact of such acquisitions on the Company’s business,
including our ability to successfully implement integration
strategies or achieve expected synergies and operating
efficiencies; any legal proceedings that may be brought related to
such acquisitions; our projections related to said acquisitions may
not materialize as expected; such acquisitions may not be timely
completed, if completed at all; and other risks and factors
identified from time to time in the Company’s reports filed with
the SEC, including the Company’s ability to generate sufficient
cash flows from operations, proceeds from equity issuances and debt
financings, and proceeds from the sale of assets to satisfy its
short- and long-term debt obligations and to fund the Company’s
acquisitions and capital improvement projects to expand, redevelop,
and/or reposition its senior living communities; increases in
market interest rates that increase the cost of certain of our debt
obligations; increased competition for, or a shortage of, skilled
workers, including due to general labor market conditions, along
with wage pressures resulting from such increased competition, low
unemployment levels, use of contract labor, minimum wage increases
and/or changes in overtime laws; the Company’s ability to obtain
additional capital on terms acceptable to it; the Company’s ability
to extend or refinance its existing debt as such debt matures; the
Company’s compliance with its debt agreements, including certain
financial covenants, and the risk of cross-default in the event
such non-compliance occurs; the Company’s ability to complete
acquisitions and dispositions upon favorable terms or at all,
including the possibility that the expected benefits and our
projections related to such acquisitions may not materialize as
expected; the risk of oversupply and increased competition in the
markets which the Company operates; the Company’s ability to
improve and maintain controls over financial reporting and
remediate the identified material weakness discussed in its recent
Quarterly and Annual Reports filed with the SEC; the cost and
difficulty of complying with applicable licensure, legislative
oversight, or regulatory changes; risks associated with current
global economic conditions and general economic factors such as
inflation, the consumer price index, commodity costs, fuel and
other energy costs, competition in the labor market, costs of
salaries, wages, benefits, and insurance, interest rates, and tax
rates; the impact from or the potential emergence and effects of a
future epidemic, pandemic, outbreak of infectious disease or other
health crisis; and changes in accounting principles and
interpretations.
About Sonida
Dallas-based Sonida Senior Living, Inc. is a leading owner,
operator and investor in independent living, assisted living and
memory care communities and services for senior adults. The Company
provides compassionate, resident-centric services and care as well
as engaging programming operating 83 senior housing communities in
20 states with an aggregate capacity of approximately 9,000
residents, including 70 communities which the Company owns
(including eight communities in which the Company owns varying
interests through two separate joint ventures), and 13 communities
that the Company manages on behalf of a third-party.
For more information, visit www.sonidaseniorliving.com or
connect with the Company on Facebook, X or LinkedIn.
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version on businesswire.com: https://www.businesswire.com/news/home/20240823902763/en/
Investor Relations Jason Finkelstein Ignition Investor
Relations ir@sonidaliving.com
Sonida Senior Living (NYSE:SNDA)
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