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EXHIBIT 99.1
NEWS
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FOR FURTHER INFORMATION CONTACT:
ALTERNATIVE LIVING SERVICES
Bill Lasky CEO - (414) 789-9565
Media contact - Gary Kastel, Director of Corporate Communications (414) 827-6927
STERLING HOUSE CORPORATION
Tim Buchanan Chairman and CEO - (316) 684-8300
Media contact - Robert P. Jones, Jill Ruja Morgen-Walke Associates
(212) 850-5600
FOR IMMEDIATE RELEASE:
ALTERNATIVE LIVING SERVICES, INC. AND STERLING HOUSE CORPORATION AGREE TO MERGE
FORMING THE NATION'S LARGEST ASSISTED LIVING COMPANY
Brookfield, Wisconsin (July 31, 1997) - Alternative Living Services, Inc.
("ALS") (AMEX:ALI) and Sterling House Corporation ("Sterling House")
(AMEX:SGH), announced today that they have entered into a definitive merger
agreement under which Alternative Living Services, Inc. will issue 1.1 shares
of its common stock in exchange for each outstanding share of Sterling House
common stock. The announcement was made jointly by William Lasky, President
and Chief Executive Officer of ALS, and Timothy Buchanan, Chairman of the Board
and Chief Executive Officer of Sterling House.
This strategic business combination will create the nation's largest assisted
living company providing healthcare services both in terms of total revenues
and residences in operation, as well as the largest operator of residences for
individuals with Alzheimer's disease and other memory impairments.
The combined company will have 178 residences in operation in 19 states with an
aggregate capacity
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to accommodate approximately 8,000 residents. The combined Company will have
66 residences under construction and 81 in development. Current annualized
revenues of the combined Company are in excess of $115 million.
The boards of directors of ALS and Sterling House have each unanimously
approved the merger agreement. The transaction is valued at approximately
$170 million, including the assumption of all outstanding Sterling House
indebtedness.
After the merger, there will be approximately 18.5 million shares of ALS common
stock outstanding with a value, based on current market prices, of
approximately $400 million. Holders of approximately 46% of the outstanding
shares of Sterling House have agreed to vote their shares in favor of the
merger, and each of ALS and Sterling House have granted to the other an option
to purchase 19.9% of the outstanding common stock of the other under certain
circumstances.
This business combination is intended to qualify as a tax-free reorganization
and is expected to be accounted for as a pooling of interests. The parties
contemplate closing the merger in the fourth quarter of 1997. Closing of the
merger is subject to the satisfaction of customary conditions, including the
receipt of stockholder and regulatory approvals. Schroder & Co. Inc. is acting
as financial advisor to Sterling House. McDonald & Company Securities, Inc. is
acting as financial advisor to ALS.
William Petty will continue to serve as Chairman, William Lasky as Chief
Executive Officer, and Timothy Buchannan will join as President, of the
combined Company. Steven Vick will continue to serve as President of Sterling
House during the initial transition period and will then serve as Chief
Operating Officer of the combined Company.
"We believe this strategic merger establishes a strong national platform which
will serve to enhance shareholder value by bringing together two highly
experienced management teams," Bill Lasky and Tim Buchanan stated. "These
teams share a common vision to provide choice for our country's frail elderly
with high quality healthcare services and attractive residential options,"
they said. "In addition, we believe the combined Company will derive
significant economic benefits including certain operating synergies and
increased access to traditional and capital financing sources," Lasky and
Buchanan said.
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STATISTICAL SUMMARY
ALS SGH COMBINED
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Assisted Living Facilities 92 86 178
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Assisted Living Units-Operating 4,384 3,196 7,580
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Assisted Living Units-Under Construction 1,703 1,074 2,777
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Assisted Living Units-Under Development 1,532 1,727 3,259
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States Served 15 6 19
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Employees 2,900 1,700 4,600
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Alternative Living Services is among the nation's largest operators of
assisted living residences. The Company offers four types of home-like
residential models including the Clare Bridge residence for individuals with
Alzheimer's disease and other dementias; and three models to serve the frail
elderly: the Wynwood, a suburban, upscale residence; the WovenHearts, a
residence for smaller communities; and, the Crossings, an apartment style
residence.
Except for historical information, all other matters in this press release are
forward-looking statements that involve risks and uncertainties as detailed
from time to time in each of ALS and Sterling Houses's SEC filings.