[GRAPHIC OMITTED]
Ventas, Inc. 4360 Brownsboro Road Suite 115 Louisville, Kentucky 40207-1642
(502) 357.9000 (502) 357.9001 Fax
Contacts: VENTAS, INC.:
-------------
Debra A. Cafaro
Chairman, President and CEO
or
Richard A. Schweinhart
Senior Vice President and CFO
(502) 357-9000
ELDERTRUST:
-----------
Michael R. Walker
Executive Chairman, Acting
President and CEO
(302) 993-1022 x100
VENTAS TO ACQUIRE ELDERTRUST IN $184 MILLION TRANSACTION
Transaction Expected to be Accretive to Ventas's 2004 FFO
LOUISVILLE, Ky. and WILMINGTON, Del. (November 20, 2003) - Ventas, Inc.
(NYSE:VTR) ("Ventas" or the "Company") and ElderTrust (NYSE:ETT) ("ElderTrust")
said today that the two companies have entered into a definitive merger
agreement for Ventas to acquire all of the outstanding common shares of
ElderTrust for $12.50 per share, in an all cash transaction valued at $184
million.
"We are delighted to announce this merger agreement with ElderTrust,
another important step in our strategic diversification plan. The transaction
should be accretive to Ventas's 2004 Funds From Operations (FFO), and
ElderTrust's assets represent an attractive addition to our portfolio," Ventas
Chairman, President and CEO Debra A. Cafaro said. "This merger meets our stated
goals of acquiring high quality assets in preferred markets that generate
sustainable cash flow and that are operated by care providers with good
reputations. We are especially pleased that we will have Genesis as an
important, new tenant and that we have begun to diversify our investments into
assisted and independent living assets."
Upon completion of the transaction, Ventas will own ElderTrust's 18
healthcare and senior housing assets. The principal tenant of these properties
will be the eldercare and therapy business that is currently an operating unit
of Genesis Healthcare Ventures (NASDAQ: GHVI) ("Genesis"), ElderTrust's primary
tenant.
ElderTrust Executive Chairman and acting President and CEO Michael R.
Walker is the founder, former Chairman and CEO of Genesis. Walker commented
that, "This transaction delivers on our assurances that we would maximize value
for ElderTrust's shareholders. We look forward to completing this merger with
Ventas."
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Ventas to Acquire ElderTrust in $184 Million Transaction
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November 20, 2003
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The net purchase price of $152 million (before transaction expenses)
represents approximately a 10 percent capitalization rate on ElderTrust's
expected annual cash net operating income from its properties of approximately
$15 million. With the closing of the transaction, which is expected to occur in
the first quarter of 2004, Ventas will add nine assisted living facilities, one
independent living facility, five skilled nursing facilities, two medical office
buildings and a financial office building to its portfolio. The ElderTrust
properties are located in Pennsylvania, Massachusetts and New Jersey. A detailed
schedule of the assets to be acquired is attached to this Press Release. The
operators of the 15 senior housing and skilled nursing properties in the
portfolio, in addition to Genesis, are expected to include Benchmark Assisted
Living and Newton Senior Living, LLC, two high quality privately held senior
living operators based in Massachusetts.
Ventas said that, on a full year basis, the transaction should add five
to seven cents to its fully diluted FFO per share. The Company also said it
expects to fund the $101 million equity portion of the purchase price from: cash
on ElderTrust's balance sheet; proceeds Ventas should receive later this year
from its previously announced sale of 10 facilities to its primary tenant
Kindred Healthcare, Inc. (Nasdaq: KIND); and/or draws on the Company's revolving
credit facility. ElderTrust is projected to have approximately $26 million in
unrestricted cash, and $6 million of restricted cash, on its balance sheet at
the closing. Ventas's ownership of ElderTrust assets will be subject to
approximately $83 million of property level debt and other liabilities.
ElderTrust owns approximately 96 percent of the partnership units in
ElderTrust Operating Limited Partnership (ETOP), which, in turn, owns all of
ElderTrust's properties. At the closing of the transaction, Ventas expects to
acquire all of the limited partnership units in ETOP directly from their owners
at $12.50 per unit, excluding 31,455 Class C Units in ETOP (which will remain
outstanding).
Successful completion of the merger, which is structured as a one-step
merger, will require approval from two-thirds of the ElderTrust shareholders. As
part of the transaction, Ventas has obtained agreements from certain current and
former ElderTrust officers and directors, who own approximately twelve percent
of the outstanding ElderTrust shares, to vote in favor of the merger. The
transaction does not require the vote of Ventas shareholders. The merger
agreement will also be subject to satisfaction of certain other conditions,
including the completion of the previously announced Genesis spinoff, which is
expected to occur in December 2003, and the implementation of agreements in
place between Genesis, ElderTrust and other third parties. There can be no
assurance that the merger will close or, if it does, when the closing will
occur.
Merrill Lynch is acting as Ventas's exclusive financial advisor, and
Wachovia Securities is acting as ElderTrust's exclusive financial advisor, in
the transaction.
CONFERENCE CALL TODAY AT 11:00 a.m. (Eastern)
Ventas will hold a conference call to discuss this release today,
Thursday, November 20, 2003, at 11:00 a.m. Eastern Time (10:00 a.m. Central
Time). The conference call is being web cast by CCBN and can be accessed at the
Ventas website at www.ventasreit.com or www.fulldisclosure.com. An online replay
of the web cast will be available at approximately 1:00 p.m. Eastern Time and
will be archived for thirty (30) days.
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Ventas to Acquire ElderTrust in $184 Million Transaction
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November 20, 2003
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ElderTrust is a real estate investment trust that invests in real
estate properties used in the healthcare services industry, principally along
the East Coast of the United States.
Ventas, Inc. is a healthcare real estate investment trust that owns 44
hospitals, 202 nursing facilities and nine other healthcare and senior housing
facilities in 37 states. The Company also has investments in 25 additional
healthcare and senior housing facilities. More information about Ventas can be
found on its website at www.ventasreit.com.
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Ventas to Acquire ElderTrust in $184 Million Transaction
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November 20, 2003
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This Press Release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements regarding
Ventas, Inc.'s ("Ventas" or the "Company") and its subsidiaries' expected future
financial position, results of operations, cash flows, funds from operations,
dividends and dividend plans, financing plans, business strategy, budgets,
projected costs, capital expenditures, competitive positions, growth
opportunities, expected lease income, continued qualification as a real estate
investment trust, plans and objectives of management for future operations and
statements that include words such as "anticipate," "if," "believe," "plan,"
"estimate," "expect," "intend," "may," "could," "should," "will" and other
similar expressions are forward-looking statements. Such forward-looking
statements are inherently uncertain, and security holders must recognize that
actual results may differ from the Company's expectations. The Company does not
undertake a duty to update such forward-looking statements.
Actual future results and trends for the Company may differ materially
depending on a variety of factors discussed in the Company's filings with the
Securities and Exchange Commission. Factors that may affect the plans or results
of the Company include, without limitation, (a) the ability and willingness of
Kindred Healthcare, Inc. ("Kindred") and certain of its affiliates to continue
to meet and/or perform their obligations under their contractual arrangements
with the Company and the Company's subsidiaries, including without limitation
the lease agreements and various agreements entered into by the Company and
Kindred at the time of the Company's spin off of Kindred on May 1, 1998 (the
"1998 Spin Off"), as such agreements may have been amended and restated in
connection with Kindred's emergence from bankruptcy on April 20, 2001, (b) the
ability and willingness of Kindred to continue to meet and/or perform its
obligation to indemnify and defend the Company for all litigation and other
claims relating to the healthcare operations and other assets and liabilities
transferred to Kindred in the 1998 Spin Off, (c) the ability of Kindred and the
Company's other operators to maintain the financial strength and liquidity
necessary to satisfy their respective obligations and duties under the leases
and other agreements with the Company, and their existing credit agreements, (d)
the Company's success in implementing its business strategy, (e) the nature and
extent of future competition, (f) the extent of future healthcare reform and
regulation, including cost containment measures and changes in reimbursement
policies, procedures and rates, (g) increases in the cost of borrowing for the
Company, (h) the ability of the Company's operators to deliver high quality care
and to attract patients, (i) the results of litigation affecting the Company,
(j) changes in general economic conditions and/or economic conditions in the
markets in which the Company may, from time to time, compete, (k) the ability of
the Company to pay down, refinance, restructure, and/or extend its indebtedness
as it becomes due, (l) the movement of interest rates and the resulting impact
on the value of and the accounting for the Company's interest rate swap
agreement, (m) the ability and willingness of the Company to maintain its
qualification as a REIT due to economic, market, legal, tax or other
considerations, (n) final determination of the Company's taxable net income for
the year ending December 31, 2003, (o) the ability and willingness of the
Company's tenants to renew their leases with the Company upon expiration of the
leases and the Company's ability to relet its properties on the same or better
terms in the event such leases expire and are not renewed by the existing
tenants, (p) risks associated with the proposed merger, (q) the impact on the
liquidity, financial condition and results of operations of Kindred and the
Company's other operators resulting from increased operating costs and uninsured
liabilities for professional liability claims, and the ability of Kindred and
the Company's other operators to accurately estimate the magnitude of such
liabilities, and (r) the factors listed below regarding ElderTrust. Many of such
factors are beyond the control of the Company and its management.
Certain matters discussed within this press release may be deemed to be
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. With respect to all statements regarding
ElderTrust's and its subsidiaries' ("ElderTrust's") expected future financial
position, results of operations, cash flows, funds from operations, dividends
and dividend plans, financing plans, business strategy, budgets, projected
costs, capital expenditures, competitive positions, growth opportunities,
expected lease income, continued qualification as a real estate investment
trust, plans and objectives of management for future operations and statements
that include words such as "anticipate," "if," "believe," "plan," "estimate,"
"expect," "intend," "may," "could," "should," "will" and other similar
expressions are forward-looking statements. Such forward-looking statements are
inherently uncertain, and security holders must recognize that actual results
may differ from the expectations of the issuers of this press release (the
"Issuers"). Although the Issuers believe the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, they can give
no assurance that their expectations will be attained. Factors that could cause
actual results of ElderTrust to differ materially from these expectations
include the extent to which ElderTrust can consummate the proposed transaction
with Genesis Health Ventures, Inc. (and after the previously announced spin-off,
Genesis HealthCare), risks associated with completion of the merger, risks
associated with the unanticipated adverse business developments affecting
ElderTrust or Ventas, adverse changes in the real estate markets, and local as
well as general economic and competitive factors and other risks detailed from
time to time in the ElderTrust's SEC reports and filings. The Issuers assume no
obligation to update or supplement forward-looking statements that become untrue
because of subsequent events.
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Ventas to Acquire ElderTrust in $184 Million Transaction
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November 20, 2003
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Supplemental Schedule
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Facility Name Type (1) State Beds Sq. Ft. Operator/Tenant
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Heritage Woods (2) ALF MA 126 Genesis
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Berkshire Commons (2) ALF PA 75 Genesis
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Lehigh (2) ALF PA 75 Genesis
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Sanatoga Court (2) ALF PA 85 Genesis
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Woodbridge ALF PA 90 Newton Senior Living, LLC
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Highgate at Paoli Pointe (2) ALF PA 85 Genesis
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Heritage at North Andover ALF MA 98 Benchmark Assisted Living
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Heritage at Vernon Court ALF MA 115 Benchmark Assisted Living
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Heritage at Cleveland Circle ALF MA 90 Benchmark Assisted Living
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Cabot Park Village ILF MA 100 (3) Benchmark Assisted Living
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Lopatcong Center (2) SNF NJ 153 Genesis
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Wayne Center SNF PA 108 Jefferson Extended Care, Inc.
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Belvedere Nursing & Rehab SNF PA 169 Genesis
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Chapel Manor SNF PA 240 Genesis
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Pennsburg Manor SNF PA 120 Genesis
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Professional Office Building I MOB PA 48,000 Multi-Tenant
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DCMH Medical Office Building MOB PA 66,000 Multi-Tenant
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Lacey Branch Office Building Bank NJ 4,100 Multi-Tenant
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TOTAL 1,729 118,100
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1. ALF = Assisted Living Facility
ILF = Independent Living Facility
SNF = Skilled Nursing Facility
MOB = Medical Office Building
2. Change of guarantor from Genesis Health Ventures to Genesis HealthCare
Corporation (and $5 million payment) expected to be finalized upon
completion of the Genesis spin and satisfaction of other conditions.
3. Expressed in units, not beds
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Ventas to Acquire ElderTrust in $184 Million Transaction
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November 20, 2003
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Estimated incremental annualized FFO per diluted share from the ElderTrust
merger:
Annual Increment
--------------------------
Per diluted share:
Net income $(0.03) - $(0.01)
Adjustments:
Depreciation on real estate assets 0.08 - 0.08
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FFO increment $ 0.05 - $ 0.07
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Historical cost accounting for real estate assets implicitly assumes that
the value of real estate assets diminishes predictably over time. Since real
estate values instead have historically risen or fallen with market conditions,
many industry investors have considered presentations of operating results for
real estate companies that use historical cost accounting to be insufficient by
themselves. To overcome this problem, the Company considers FFO an appropriate
measure of performance of an equity REIT and uses the National Association of
Real Estate Investment Trusts ("NAREIT") definition of FFO. NAREIT defines FFO
as net income (computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from sales of property, plus
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures. Adjustments for unconsolidated partnerships and
joint ventures will be calculated to reflect funds from operations on the same
basis.
FFO presented herein is not necessarily comparable to FFO presented by
other real estate companies due to the fact that not all real estate companies
use the same definition. FFO should not be considered as an alternative to net
income (determined in accordance with accounting principles generally accepted
in the United States ("GAAP")), as an indicator of the Company's financial
performance, as an alternative to cash flow from operating activities
(determined in accordance with GAAP), as a measure of the Company's liquidity,
nor is FFO necessarily indicative of sufficient cash flow to fund all of the
Company's needs. The Company believes that in order to facilitate a clear
understanding of the consolidated historical operating results of the Company,
FFO should be examined in conjunction with net income as presented elsewhere in
the Company's filings on Form 10-Q and Form 10-K.
-End-