Sentio Healthcare Properties Completes Merger at $14.65 Per Share

September 1, 2017 | James Sprow | Blue Vault

Sentio Healthcare Properties Inc. completed its merger with Kayne Anderson Real Estate Advisors affiliates on Aug. 31.

The merger consideration was $14.65 per Sentio common share, along with one “Contingent Value Right” as defined in the merger agreement. The REIT’s outstanding preferred stock was automatically cancelled and converted into the right to receive in cash an amount per share equal to the “Liquidation Preference Amount” as defined in the merger agreement. The deal is expected to have an $825 million estimated total asset value. The most recently announced estimated net asset value per share was $12.45, effective March 23, 2016. 

In connection with the merger, all directors on the board of directors of Sentio tendered their resignations.

Kayne Anderson Real Estate is Kayne Anderson Capital Advisors LP’s private equity arm, while Sentio Healthcare is backed by KKR & Co. LP.

Interestingly, MacKenzie Capital Management, LP, in a tender offer dated February 5, 2016, offered to purchase up to 600,000 shares of Sentio Healthcare Properties for $5.00 per share. The offer resulted in a tender by shareholders and acceptance of payment for approximately 9,519 shares. The board of directors of Sentio had unanimously recommended against acceptance of the tender offer. 

Sentio Healthcare Properties shares were originally issued at $10.00 per share in 2008 when it was known as Cornerstone Growth & Income REIT, Inc. In its IPO commencing in 2008 it raised $123.9 million and in a follow-on offering in 2011 it raised an additional $8.4 million. It has paid a distribution at the rate of 5.00% annualized based upon the original $10.00 offering price since 2013.

As of June 30, 2017, the REIT owned or had joint venture interests in 34 properties. These properties included 27 memory care, assisted-and independent-living facilities, which comprise the senior housing segment, one medical office building, which comprises the MOB segment, five operating healthcare facilities, which comprise the triple-net leased segment, and one facility held as an unconsolidated entity.