Atria Management Announces Completion of Growth-Focused Capital Raise with Fremont Group and Ventas
December 21, 2017
LOUISVILLE, KY–Senior executives for Atria Senior Living have raised growth capital by selling 50 percent of their ownership interest in Atria’s business to Fremont Realty Capital, the real estate private equity business unit of the Fremont Group, the investment office of the Bechtel family of San Francisco.
The transaction values Atria at a substantially increased level compared to the 2012 transaction in which the management team increased their stake to 66 percent and Ventas acquired 34 percent of the business. Proceeds have been reinvested in Atria, and Ventas has also made an additional investment in Atria to maintain its 34 percent ownership stake without dilution.
Proceeds will also be invested, along with an additional investment by Ventas, in a new venture that will act as general partner (“GP”) in a $1 billion real estate venture(s) with a dedicated focus on development and redevelopment opportunities in high-barrier-to-entry markets.
The transactions will result in Atria’s senior executives, Fremont and Ventas owning both Atria’s management services business and the newly formed real estate venture GP in 33 percent, 33 percent and 34 percent shares, respectively. Additionally, the GP intends to raise $300–$400 million of limited partner capital to fund the dedicated development and redevelopment strategy.
“The Atria management team has worked together to build Atria into a world-class senior housing management services business dedicated to providing exceptional service for its residents, rewards to its dedicated employees and high quality returns for its business partners and property owners for which it provides management services,” said Atria Senior Living Chairman and CEO John A. Moore. “With this additional capital we can continue to build scale and accelerate our investments in infrastructure and systems to better position us for both the current environment and our maturing industry as it prepares for the demographic wave that is around the corner.”
“It is very exciting to partner with both Fremont and Ventas. Fremont’s track record and experience building high-quality businesses for the long-term and the talent of their team will be a great asset for Atria,” Moore continued. “And we also couldn’t have asked for a better partner than Ventas. Ventas has been supportive and invaluable in helping us grow our business, and we’re thrilled to continue down this path together.”
“Atria has built an industry leading platform and we couldn’t be more thrilled to become partners with the Atria management team and Ventas. Atria’s operating capabilities are forward looking and represent the future of the industry. We look forward to being long term value adding partners,” said Claude Zinngrabe, managing partner, Fremont Realty Capital.
Atria has increased the number of communities it manages on a long-term basis from 125 to over 200, doubling revenue under management since 2011, when Ventas purchased substantially all of Atria’s real estate. Atria’s pure play seniors housing management services platform now operates in 28 states and seven Canadian provinces, for Ventas as well as over 10 other real estate owners. Atria has significant market presence in high barrier to entry markets, including metropolitan New York, the Bay Area of Northern California, Southern California and Boston. It employs more than 16,000 people and is home to over 20,000 residents. Atria operates a state-of-the-art Support Center in Louisville, Kentucky and has grown its home office employment 50 percent since 2011.