In the first merger of two publicly traded assisted-living companies, Brookfield, Wis.-based Alternative Living Services and Wichita, Kan.-based Sterling House Corp. late last week agreed to join in a $170 million deal.
Although other investor-owned assisted-living companies have been repositioning themselves, none has merged with another publicly traded company.
Most recently, Whitehall Street Real Estate, a real estate investment fund affiliated with Goldman, Sachs & Co., bought Bonita Springs, Fla.-based Integrated Living Communities in an $87.4 million cash tender offer.
And in October 1996, one of the first major assisted-living mergers joined Standish Care, a public company, with CareMatrix, which remained private until the merger.
The merger between Alternative Living and Sterling House is expected to accelerate consolidation in the maturing assisted-living industry. About 12 other investor-owned assisted-living companies make up the current field.
Under the agreement, Alternative Living will issue 1.1 shares of its common stock in exchange for each outstanding share of Sterling House common stock.
The boards of both companies have approved the transaction, which is expected to be completed in the fourth quarter of 1997.
The combined company will be one of the nation's largest assisted-living companies with an anticipated $115 million in annual revenues.
It will operate 178 assisted-living residences in 19 states and will have 65 additional facilities under construction and 81 in development.
William Petty, chairman of Alternative Living, will continue as chairman of the combined company.
William Lasky, president and chief executive officer of Alternative Living, will be the new company's CEO; and Timothy Buchanan, chairman and CEO of Sterling House, will join as president of the combined company.