================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 1, 1997
--------------------
ATRIA COMMUNITIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21159 61-1303738
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation or
organization)
515 West Market Street
Louisville, Kentucky
(Address of principal executive offices)
40202
(Zip Code)
Registrant's telephone number, including area code: (502) 596-7540
Not Applicable
(Former name or former address, if changed since last report.)
================================================================================
ITEM 1. NOT APPLICABLE.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 1, 1997, Atria Communities, Inc. (the "Company") completed
its previously announced acquisition of American ElderServe Corporation
("American ElderServe"), an Atlanta based operator of assisted living
communities in the southeast portion of the United States for a combination of
stock and cash plus debt assumption with a total value of approximately $30.5
million. Pursuant to the terms of the Agreement and Plan of Merger, dated as of
March 3, 1997, among the Company, Atria Communities Southeast, Inc. ("Atria
Southeast"), American ElderServe, Andy L. Schoepf, Elizabeth A. Schoepf and
Evely C. Schoepf (the "Merger Agreement"), American ElderServe merged (the
"Merger") with and into the Company's wholly-owned subsidiary, Atria Southeast.
Pursuant to the Merger Agreement, all outstanding shares of American ElderServe
common stock were converted into a total consideration of 636,487 shares of
common stock of the Company and approximately $7,421,000 in cash. The Company
financed the cash portion of the consideration from the proceeds received by the
Company from its initial public offering of common stock in August 1996.
Prior to the Merger, American ElderServe operated 12 assisted living
communities consisting of 503 units. The communities are located as follows:
ten in the greater Atlanta, Georgia area; one in Auburn, Alabama; and one in
Houston, Texas. American ElderServe also had six additional communities under
construction and scheduled to open in 1997. These communities will contain
approximately 345 additional units. The communities under construction are
located in the greater Atlanta, Georgia area; Charlotte, North Carolina;
Jacksonville, Florida; Augusta, Georgia; Houston, Texas; and Chattanooga,
Tennessee.
In connection with the Merger, Andy L. Schoepf became the Chief
Operating Officer of the Company. Mr. Schoepf was a shareholder in American
ElderServe and was serving as its President and Chief Executive Officer at the
time of the Merger. In connection with the Merger, Mr. Schoepf received 636,487
shares of common stock, including certain demand and piggyback registration
rights with respect to such common stock. In addition, the Company agreed to
nominate a person selected by Mr. Schoepf as a nominee for the Board of
Directors of the Company and obtain approval of Vencor, Inc. to vote its shares
of common stock in favor of such nominee until such time as Mr. Schoepf holds
less than 400,000 shares of common stock. The Company has nominated Mr. Schoepf
for election to its Board of Directors at the Company's upcoming Annual Meeting
of Shareholders.
Simultaneously with the closing of the Merger, the Company entered
into a joint venture development agreement. Under this agreement, the Company
owns ten percent and George A. Schoepf, former Executive Vice President of
America ElderServe and the brother of Andy L. Schoepf, owns 90% of a newly
formed development company, Elder Healthcare Developers, LLC (the "Development
Company"). The Development Company has an exclusive right to develop assisted
living communities for the Company in an 11 state region in the southeast United
States. The Company has agreed that the Development Company will develop at
least 15
2
communities in the southeast region over the next three years. The Company will
have the first option to purchase any such developed community at the lesser of
its fair market value or the cost to develop and operate such community up to
the time of purchase plus the sum of $666,666. The Company may exercise its
option to purchase such a community only after the community's operations become
profitable as defined in the development agreement. In connection with the
development of such communities, the Company has agreed to fund all construction
costs of the Development Company through the use of its $200 million bank credit
facility (the "Credit Facility"). Such communities will secure the borrowings
under the Credit Facility. The Company will manage these communities from the
date they commence operations and has agreed to fund operating losses of these
communities through the use of its Credit Facility. George A. Schoepf will serve
as President and Chief Executive Officer of the Development Company.
ITEMS 3-6. NOT APPLICABLE.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired.
Not applicable because below reporting thresholds.
(b) Pro forma financial information.
Not applicable because below reporting thresholds.
(c) Exhibits.
2.1 Agreement and Plan of Merger among Atria Communities, Inc., Atria
Communities Southeast, Inc., American ElderServe Corporation, Andy L.
Schoepf, Elizabeth A. Schoepf, and Evely C. Schoepf dated as of March
3, 1997.
99.1 Registration Rights Agreement between Atria Communities, Inc. and Andy
L. Schoepf dated as of April 1, 1997.
99.2 Development Agreement between Elder Healthcare Developers, LLC and
Atria Communities, Inc. dated as of April 1, 1997.
99.3 Operating Agreement of Elder Healthcare Developers, LLC dated as of
April 1, 1997.
ITEM 8. NOT APPLICABLE.
ITEM 9. NOT APPLICABLE.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ATRIA COMMUNITIES, INC.
Dated: April 11, 1997 By: /s/ J. Timothy Wesley
------------------------
J. Timothy Wesley
Chief Financial Officer,
Vice President of Development and
Secretary
4