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Press release from CNW Group

Amica Mature Lifestyles agrees to acquire luxury retirement residence and announces $29.8 million offering of subscription receipts

Wednesday, November 23, 2011

Amica Mature Lifestyles agrees to acquire luxury retirement residence and announces $29.8 million offering of subscription receipts16:40 EST Wednesday, November 23, 2011/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES/VANCOUVER, Nov. 23, 2011 /CNW/ - (TSX: ACC) - Amica Mature Lifestyles Inc. ("Amica" or the "Company") announced today that it has agreed to acquire Quinte Gardens, a luxury independent living retirement residence located in Belleville, Ontario (the "Acquisition"). In conjunction with this transaction, the Company also announced that it has entered into an agreement with a syndicate of underwriters led by Canaccord Genuity Corp. (the "Underwriters"), to purchase, on a bought deal basis, $29.8 million of subscription receipts ("Subscription Receipts") of the Company at a price of $7.45 per Subscription Receipt (the "Offering").The Quinte Gardens retirement residence is a recently developed, 239 suite luxury retirement residence featuring high quality amenities. It is the premier retirement residence in the Belleville and broader Quinte region market. The Acquisition is expected to close on January 19, 2012."The acquisition of the Quinte Gardens retirement residence provides a tremendous opportunity for Amica to further strengthen its portfolio of luxury Wellness & Vitality™ communities and to expand its brand presence in the Ontario marketplace," said Samir Manji, Chairman, President and Chief Executive Officer of Amica. "We believe there is a significant demand for the quality of services, accommodation and lifestyles that we offer within our existing communities. This, combined with the exceptional location of Quinte Gardens and its 'top-of-market' status, gives us confidence about the long term prospects for the acquisition. We believe this residence, to be rebranded as an Amica Wellness & Vitality™ Residence, will be the dominant retirement residence in Belleville and the Quinte region."The purchase price of the Acquisition is $70.5 million (the "Purchase Price"). Based on the stabilized Net Operating Income ("NOI") agreed to with the vendor, the capitalization rate on the transaction is approximately 8.0%.As the Acquisition is currently in the lease-up period, the Purchase Price includes an income guarantee fund of $2.25 million which will be held in escrow on closing of the Acquisition. During the lease-up period, Amica may draw on this income guarantee fund to supplement the property's income until the earlier of reaching an agreed monthly stabilized NOI for three consecutive months and 24 months after the closing of the Acquisition. At the end of the term of the income guarantee fund any remaining funds will be paid to the vendor. The Acquisition is anticipated to be immediately accretive to the Company. The Company anticipates the property will achieve stabilized occupancy within 24 months from the date of closing.In order to partially finance the Purchase Price and acquisition costs, the Company has agreed to sell 4,000,000 Subscription Receipts, on a bought deal basis, at a price of $7.45 per Subscription Receipt to a syndicate of underwriters led by Canaccord Genuity Corp. for gross proceeds of $29.8 million. In addition, Amica has granted to the Underwriters an over-allotment option exercisable at any time up to 30 days after closing of the Offering to acquire up to an additional 600,000 Subscription Receipts of the Company. In the event that the over-allotment option is exercised in full, the aggregate gross proceeds of the Offering will be approximately $34.3 million.Each Subscription Receipt represents the right to receive one common share of the Company for no additional consideration on the closing of the Acquisition. The proceeds from the Offering of Subscription Receipts will be deposited in escrow pending satisfaction of the escrow release conditions, which include satisfying the closing conditions for the Acquisition (other than payment of the Purchase Price). If the Acquisition closes on or before January 31, 2012, the gross proceeds from the Offering of Subscription Receipts will be released to the Company and used by it to pay a portion of the Purchase Price. If the Acquisition fails to close by January 31, 2012, or the Acquisition is terminated at an earlier time, the escrow agent will return the gross proceeds and pro rata entitlement to interest thereon to holders of the Subscription Receipts.The Subscription Receipts will be offered by way of a short form prospectus to be filed with the securities commissions and other similar regulatory authorities in each of the provinces of Canada, except Quebec, pursuant to National Instrument 44-101 - Short Form Prospectus Distributions.Closing of the Offering is currently expected to take place on December 14, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange and the securities regulatory authorities.In addition to the proceeds from the Offering, the Company has a commitment letter from a Canadian chartered bank to provide mortgage financing for the Acquisition in the amount of $48.3 million at an interest rate of prime plus 0.5% for an open five year term.Quinte Gardens, located in Belleville, Ontario, opened for business in 2006 and was developed in two phases: phase 1 opened in November 2006 and phase 2 opened in December 2008. The property is a four storey (Phase 1) and seven storey (Phase 2), 179,431 square foot property with current occupancy of 75%. The building features a total of 239 suites, ranging from 272 to 961 square feet. Assisted living is provided on the secured second floor of the building. The retirement residence features spacious lounges, a large fine dining area, a salt water swimming pool, arts and crafts room, sunroom, beauty salon, private dining room, home theatre, on-site physiotherapy clinic, library with computer workstations, fitness room, large multi-purpose auditorium and games room. Large bright open areas with spectacular views of the landscaped gardens complement the building.Upon completion of the Acquisition, the Company intends to initially operate the Quinte Gardens retirement residence under the current brand and model. With a detailed transition plan, the Company intends to transition the Quinte Gardens retirement residence to an Amica Wellness & Vitality™ model which will require minor modifications operationally and physically and will then include the formal rebranding of the property under the Amica brand.About Amica Mature Lifestyles Inc.Amica Mature Lifestyles Inc., a Vancouver based public company, is a leader in the management, marketing, design, development and ownership of luxury housing and services for mature lifestyles. There are 24 Amica Wellness & Vitality™ Residences, including one under development and one in pre-development. The common shares of Amica are traded on the Toronto Stock Exchange under the symbol "ACC". For more information, visit www.amica.ca.Forward-Looking InformationThis news release contains "forward-looking information" within the meaning of applicable securities laws ("forward-looking statements").These forward-looking statements are made as of the date of this news release and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as otherwise required by law. Users of forward-looking statements are cautioned that actual results may vary from forward-looking statements contained herein. Forward-looking statements include, but are not limited to, statements concerning the Offering and the Acquisition, the Company's ability to complete the Offering and the Acquisition, the timing for completion of the Offering and Acquisition, proceeds expected to be raised from the Offering, the impact of the Acquisition on the Company's financial position and results, the Acquisition achieving stabilized occupancy within 24 months of the date of closing, completing the mortgage financing with the Canadian chartered bank, the amount of mortgage financing with the Canadian chartered bank, use of proceeds from the Offering and other similar statements concerning anticipated future events, conditions or results that are not historical facts. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". While the Company has based these forward-looking statements on its expectations about future events as at the date that such statements were prepared, the statements are not a guarantee of the Company's future performance and are subject to risks, uncertainties, assumptions and other factors which could cause actual results, performance or achievements to differ materially from future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors and assumptions include, amongst others, the effects of general economic and market conditions, actions by government authorities, uncertainties associated with legal proceedings and negotiations and misjudgements in the course of preparing forward-looking statements. In addition, there are known and unknown risk factors which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include, among others, risks related to: capital markets; cost overruns, delays and start-up losses for new real estate developments; the availability of capital to finance growth or refinance debt as it comes due; the ability of seniors to pay for Amica's services; Amica's ability to attract seniors with its services and keep pace with changing consumer preferences; risks inherent in the ownership of real property; operational risks inherent in owning and operating residences; dependence on the ability of Amica's co-tenancy participants to meet their obligations; interest rate volatility in the marketplace; regulatory changes;  job actions including strikes and labour stoppages; possible liability under environmental laws and regulations relating to removal or remediation of hazardous or toxic substances on properties owned or operated by Amica; the risks associated with global events such as infectious diseases, extreme weather conditions and natural disasters; foreign exchange rate volatility; as well as those factors discussed in Amica's Annual Information Form dated August 12, 2011, filed with the Canadian Securities Administrators and available at www.sedar.com and in the "Risks and Uncertainties" section of the Company's management's discussion and analysis for three months ended August 31, 2011, available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements, or the material factors or assumptions used to develop such forward looking statements, will prove to be accurate. Accordingly, readers should not place undue reliance on forward-looking statements.This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States unless registered or an applicable exemption from the registration requirements is available.For further information: Mr. Art Ayres Chief Financial Officer Amica Mature Lifestyles Inc. (604) 630-3473 a.ayres@amica.ca                     Ms. Alyssa Barry Manager, Investor Communications Amica Mature Lifestyles Inc. (604) 639-2171 a.barry@amica.ca