Ventas, Inc. (VTR) a leading health care real estate investment trust has recently completed the acquisition of 118 private senior housing communities of privately-owned Atria Senior living Group for $3.1 billion.
Before the closing of this deal, Atria senior living group spun off its management business to Atria senior living, Inc. (Atria), a new company which will continue the management of the acquired properties.
Based in Louisville, Kentucky, Atria is the fourth largest operator of assisted living properties in the U.S. It is a leading industrial operator that builds vibrant communities providing seniors with comfort and a better quality of life.
This transaction demonstrates Ventas' strength to acquire portfolios of senior housing located in the affluent coastal markets with Atria’s strong management team committed to high quality care for seniors. After this deal Ventas, becomes the largest owner of senior housing nationally.
Ventas reported first quarter 2011 funds from operations (FFO) of 62 cents per share, compared to 66 cents in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and other non-cash expenses to net income.
The company expects its 2011 FFO per diluted common share to range from $3.06 -$3.14, including the impact of the Atria acquisition. The company also expects post-closing Net operating Income (NOI) for its senior housing assets managed by Atria to be in the range of $186 million – $196 million in FY11.
Ventas is primarily engaged in the business of financing, owning and leasing healthcare related and senior housing facilities. The company has one of the largest and most diversified portfolios in the healthcare sector with exposure to all types of facilities.
The product diversity of the company allows it to capitalize on opportunities in different markets based on individual market dynamics, and provides a hard-to-replicate competitive advantage over its peers.
Ventas currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, HCP, Inc (HCP) currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
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