Ventas to acquire Provident $1.2B deal for 68 AL & IL Properties.

A deal is in the works to have Ventas Inc., one of the nation's largest senior housing owners, acquire Provident Senior Living Trust for $1.2 billion, both companies announced.

Under the deal, still subject to final approval by Provident shareholders, Ventas will assume ownership of 68 independent and assisted living properties, totaling 6,819 units in 19 states, Ventas Chairman, President and Chief Executive Officer Debra Cafaro said during a conference call. Twenty-one of the properties, containing 4,474 units, are managed by Chicago-based Brookdale Living Communities Inc.; the remaining 47 properties (2,345 units) are managed by Alterra Healthcare Corp. in Milwaukee.

The $1.2 billion price tag includes an estimated $230 million in cash to Provident shareholders, who will receive $7.81 per share plus nearly a half-share of Ventas stock, Cafaro said.

"This combination is a great transaction for Ventas and Provident shareholders/' Cafaro said. "It gives each of them a stake in what we believe is a superior healthcare REIT (real estate investment trust)."

If the deal closes as planned, Ventas will own more than 360 healthcare and senior housing operations in 40 states, Cafaro said.

Darryl Copeland Jr., Provident Senior Living Trust's chairman, president and CEO said talks had been underway with Ventas since January.

Although his company had "no real intention at that time, from our standpoint, of doing anything other than having a discussion," the positives in the merger made Ventas's offer hard to ignore, according to Copeland.

"Anyone that knows Debbie (Cafaro) knows that she's a tough negotiator," Copeland said. "She's very diligent and thorough. We had a very spirited negotiation of this transaction. But the good news is that now that we're going to become shareholders, Debbie is on our side."

Ventas, headquartered in Louisville, Ky., is one of the nation's top 40 owners of senior housing properties, according to the American Senior Housing Association. The REIT posted sales of $236.9 million in 2004, according to Marketwatch.com.

Provident, a REIT based in Princeton, N.J., was formed in March 2004 and made virtually all of its revenue through the Brookdale and Alterra properties, according to an S-11 filed in November 2004 with the Securities and Exchange Commission.

Both sets of properties were acquired by Provident in the fourth quarter of 2004 for $982.8 million, according to the S-11.