Capital Senior Living Corporation to Acquire CGI Management; Will Expand Resident Capacity to Nearly 9,000.DALLAS -- Capital Senior Living Corporation (NYSE NYSE See: New York Stock Exchange :CSU See DSU/CSU. 1. CSU - California State University. 2. CSU - Cleveland State University. 3. CSU - Channel Service Unit. ): --Acquisition expected to be immediately accretive to earnings --Strategic alliance formed to pursue development and management opportunities Capital Senior Living Corporation ("Capital") (NYSE:CSU), one of the country's largest operators of senior living communities, today announced it has signed a definitive purchase agreement with The Covenant Group of Texas, Inc. ("TCG (Trusted Computing Group, Beaverton, OR, www.trustedcomputinggroup.org) The successor to the Trusted Computer Platform Alliance (TCPA), announced in 2003 by founding members AMD, HP, IBM, Intel and Microsoft. ") to acquire all of the outstanding stock of Covenant's wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , CGI CGI in full Common Gateway Interface. Specification by which a Web server passes data between itself and an application program. Typically, a Web user will make a request of the Web server, which in turn passes the request to a CGI application program. Management, Inc. ("CGIM CGIM Conference on Computer Graphics and Imaging (IASTED International Conference) "), a Fort Worth, Texas Fort Worth is the fifth-largest city in the state of Texas, 18th-largest city in the United States[1], and voted one of "America’s Most Livable Communities. based company which operates 16 senior independent and assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. communities, including seven senior living communities owned by TCG. At the closing of Capital's purchase of CGIM's stock, Capital will receive the exclusive right and option through July 2009 to purchase the seven senior living communities owned by TCG. Capital will also receive the right of first refusal Right of First Refusal In general, the right of a person or company to purchase something before the offering is made available to others. Notes: For example, a football team may have the right of first refusal on a player's contract. to acquire the seven communities owned by TCG for a period of 15 years. In acquiring CGI Management, Capital will assume management of 16 operating properties, with a resident capacity of 2,070, including the seven properties owned by TCG for which Capital will have options to purchase and rights of first refusal. CGI Management employs approximately 500 employees. Capital will pay approximately $2.5 million in cash at closing, subject to various adjustments set forth in the purchase agreement, to acquire all of the outstanding stock of CGI Management. Capital will also pay three installments of $366,667 on the first, third and fifth anniversaries of the closing subject to reduction if the management fees earned from the nine third party owned communities with various terms are terminated and not replaced by substitute agreements during the period, and certain other adjustments. The management agreements on the TCG owned communities are for a 15-year term. The stock purchase is expected to close in the third quarter of 2004, subject to receipt of required approvals and other closing conditions. Capital will use cash on hand to acquire CGI Management. "Capital Senior Living and CGI Management hold in common many shared values and a commitment to providing quality housing and services to seniors," said James A. Stroud This article or section needs sources or references that appear in reliable, third-party publications. Alone, primary sources and sources affiliated with the subject of this article are not sufficient for an accurate encyclopedia article. , Chairman of Capital. "Our new combined organization will remain dedicated to enriching the daily lives of our senior residents by providing an environment that stimulates them physically, mentally, and emotionally." "Our two companies have tremendous similarities and our operations complement each other geographically and philosophically," said Gary Staats, President of The Covenant Group of Texas. "Of equal significance is the strategic alliance that is created between Capital and TCG in an effort to better serve organizations desiring an expanded mission to include senior housing." The CGI Management portfolio includes 16 properties located in four states (Texas, Oklahoma, Arkansas and Mississippi) with a resident capacity of 2,070. Approximately 79 percent of the portfolio is independent living and 21 percent is assisted living, with 95 percent of the revenues from private pay sources. Capital estimates that the transaction will be accretive on a cash basis and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis. The Company anticipates annual management fee revenue of approximately $1.6 million and annual incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. expenses of approximately $0.6 million. Capital and TCG will also form a strategic alliance to jointly pursue development and management opportunities for not for profit owners. TCG's leadership as a successful senior living developer for tax-exempt owners will be complemented by Capital's proven track record as a national operator of senior living communities. The strategic alliance is expected to provide Capital with a platform for additional external growth through long-term management contracts. "The acquisition of CGI Management will accelerate Capital's business plan to grow through acquisitions and additional management assignments," stated Lawrence A. Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , Chief Executive Officer. "The two organizations share many similarities that will advance a successful integration upon closing the transaction. We are optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op our integration plan will be successful and will benefit our residents, family members, employees and shareholders." 2Q04 CONFERENCE CALL INFORMATION The Company will host a conference call with senior management to discuss the Company's second quarter 2004 financial results. The call will be held on Thursday, August 5, 2004 at 11:00 am Eastern Time. The call-in number is 913-981-5510. No confirmation number is required. A link to a simultaneous webcast of the teleconference will be available at www.capitalsenior.com through Windows Media Player Digital jukebox software for Windows from Microsoft that plays a variety of audio, video and streaming formats including MP3, WMA, CD audio and MIDI. Starting with Version 6.2 in 1999, the Windows Media Rights Manager was added for securing copyrighted content. or RealPlayer. For the convenience of the Company's shareholders and the public, the conference call will be recorded and available for replay starting August 5, 2004 at 2:00 pm Eastern Time, until August 12, 2004 at 8:00 pm Eastern Time. To access the conference call replay, call 719-457-0820, confirmation code 514175. The conference call will also be made available for playback via the Company's corporate website, www.capitalsenior.com, and will be available until the next earnings release date. ABOUT THE COMPANY Capital Senior Living Corporation is one of the nation's largest operators of residential communities for senior adults. The Company's operating philosophy emphasizes a continuum of care, which integrates independent living, assisted living and home care services, to provide residents the opportunity to age in place. The Company currently operates 42 senior living communities in 20 states with an aggregate capacity of approximately 6,900 residents, including 41 senior living communities which the Company owns or in which the Company has an ownership interest, and one community it manages for a third party. In the communities operated by the Company, 86 percent of residents live independently and 14 percent of residents require assistance with activities of daily living. The forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this release are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company's ability to find suitable acquisition properties at favorable terms, financing, licensing, business conditions, risks of downturns in economic conditions generally, satisfaction of closing conditions such as those pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to licensure, availability of insurance at commercially reasonable rates, and changes in accounting principles and interpretations among others, and other risks and factors identified from time to time in our reports filed with the Securities and Exchange Commission. |
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