August 22, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shareholders of senior and assisted living service provider Sunrise Senior Living (NYSE: SRZ ) jumped for joy after shares skyrocketed 60% following an agreement to be purchased by Health Care REIT (NYSE: HCN ) .
So what: Health Care REIT, the third-largest health-focused real estate investment trust in the U.S., agreed to purchase Sunrise for $845 million, or $14.50 per share, a 62% premium to yesterday's close. The move is smart for Health Care REIT because it gives them an additional 58,000 units to take advantage of the expected 79% spike in assisted living patients by 2030, and it gives them a land value of $1.9 billion according to a statement from Health Care REIT.
Now what: Now Sunrise shareholders, go grab a pen and some paper and begin writing Health Care REIT the most heart-felt thank-you note of your lives! Sunrise barely survived the recession and has been dealing with more than $500 million in debt, all while skirting around breakeven financial results. Today's buyout is a godsend for shareholders with the stock hitting four-year highs. I'm fairly confident Health Care REIT will do a better job of capitalizing on Sunrise's potential than Sunrise's management did and would consider those who are intrigued by the prospects of a growing population and assisted living look into the health-care REIT sector for ideas rather than individual companies like Sunrise.
Craving more input? Start by adding Sunrise Senior Living to your free and personalized watchlist so you can keep up on the latest news with the company.