NEWS RELEASE
For Immediate Release | Contact: Raymond Brandstrom |
| February 28, 2007 | Chief Financial Officer |
| | (206) 298-2909 |
EMERITUS ANNOUNCES PURCHASE OF 24 COMMUNITIES
SEATTLE, WA, February 28, 2007 -- Emeritus Corporation (AMEX: ESC), a national provider of assisted living and related services to senior citizens, announced today it has closed on the purchase of 24 communities previously leased. The communities were originally acquired by the Company in October 2002 under terms of a lease with Fretus L.L.C., an entity in which Dan Baty, our CEO, has ownership interests. The Company has purchased all membership interests of Fretus L.L.C. for $145.0 million, inclusive of transaction costs. Capmark Finance, Inc. is providing $140 million of mortgage financing. These communities offer assisted and memory loss services to seniors consisting of 1,651 units located in 6 states.
In conjunction with this transaction, Baty entities affiliated with Fretus L.L.C. will provide $18 million of financing: $5 million to close the transaction and the balance to provide additional working capital to the Company. The note will be interest only for 24 months at 9 percent interest, maturing in 2009.
“Moving 11.8% of our units from leased to owned is a meaningful step in improving our overall capital structure,” stated Dan Baty, C.E.O.
ABOUT THE COMPANY
Emeritus Corporation is a national provider of assisted living and Alzheimer’s and related dementia care services to seniors. Emeritus is one of the largest and most experienced operators of freestanding assisted living communities located throughout the United States. These communities provide a residential housing alternative for senior citizens who need help with the activities of daily living with an emphasis on assistance with personal care services to provide residents with an opportunity for support in the aging process. Emeritus currently operates 203 communities representing capacity for approximately 20,000 residents in 35 states. Emeritus’s common stock is traded on the American Stock Exchange under the symbol ESC, and its home page can be found on the Internet at www.emeritus.com.
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: A number of the matters and subject areas discussed in this report that are not historical or current facts deal with potential future circumstances, operations, and prospects. The discussion of such matters and subject areas is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from our actual future experience as a result of such factors as: the effects of competition and economic conditions on the occupancy levels in our communities; our ability under current market conditions to maintain and increase our resident charges in accordance with our rate enhancement programs without adversely affecting occupancy levels; increases in interest costs as a result of re-financings; our ability to control community operation expenses, including insurance and utility costs, without adversely affecting the level of occupancy and the level of resident charges; our ability to generate cash flow sufficient to service our debt and other fixed payment requirements; our ability to find sources of financing and capital on satisfactory terms to meet our cash requirements to the extent that they are not met by operations, and other uncertainties related to professional liability claims. We have attempted to identify, in context, certain of the factors that we currently believe may cause actual future experience and results to differ from our current expectations regarding the relevant matter or subject area. These and other risks and uncertainties are detailed in our reports filed with the Securities and Exchange Commission (SEC), including our Annual Reports on Form 10-K and Quarterly Reports Form 10-Q.
