Dallas' Sonida Senior Living Acquires Orlando-Based CNL Healthcare Properties in $1.8 Billion Merger Deal

Sonida Senior Living (NYSE: SNDA), a leading Dallas-based owner, operator, and investor in senior living communities, is acquiring and merging with CNL Healthcare Properties (CHP), a public non-traded real estate investment trust which owns a national portfolio of “high-quality” senior housing communities.

Under the merger agreement, Sonida will acquire 100% of CHP in a cash and stock transaction valued at around $1.8 billion. Upon closing, Sonida said it expects the combined enterprise will have an equity market cap of around $1.4 billion and a total enterprise value of around $3 billion.

The merger will create the eighth largest owner of U.S. senior living assets, with around 14,700 owned units nationwide.The combined company will continue to trade on the NYSE under the ticker “SNDA” as a pure-play senior housing owner-operator platform—with 153 owned independent living, assisted living, and memory care senior living communities.

Sonida said the companies’ complementary footprints will deepen its exposure to high-quality assets in strong submarkets in the South, Southeast, and Midwest while expanding national exposure to attractive markets including the Mountain West and Pacific Northwest.

Seeing ‘long-term tailwinds of favorable demographics’

Brandon Ribar, president and CEO of Sonida, said his company’s overarching objective “is to capitalize on the long-term tailwinds of favorable demographics and supply constraints within senior living by operating and growing a best-in-class owner-operator platform.”

The merger “represents an inflection point in our pursuit of that objective as it more than doubles Sonida’s number of owned units while deepening and expanding our exposure to the most attractive geographic areas for our strategy,” Ribar added in a statement.

Beyond CHP’s “strong portfolio,” Ribar said his company has been impressed by CHP’s “culture of accountability, integrity and high-performance embedded across its leadership team and operating partners.”

“Their dedication to serving residents with compassion and excellence mirrors our own, making this combination a natural fit, and we’re confident that uniting our organizations will create a shared foundation built on trust, transparency, and long-term partnership,” Ribar said.

The Sonida leader stressed that the care and services provided to residents always remain “our top priority.”

CNL Healthcare Properties services around 8,000 residents

Stephen Mauldin, CEO, president and vice chairman of CNL Healthcare Properties, said that since 2012, “CHP has thoughtfully and successfully built and actively managed a leading private-pay senior housing business while providing exceptional care, services and value to our approximately 8,000 residents.”

“Looking ahead, CHP shareholders, who will become Sonida shareholders, will importantly retain the opportunity to participate in future value creation in a dynamic and attractive senior housing environment,” Mauldin added in a statement. “We’re confident the combined company will be in a strong position to deliver on behalf of its shareholders.”

Mauldin said the Sonida team shares his company’s focus on relationships and a “resident-centric culture, valuing residents and their families, whose care, comfort and happiness will now benefit from the greater scale and resources of the combined enterprise.”

Helping Sonida advance ‘three key initiatives’

A key investor in Sonida Senior Living is Summit, New Jersey-based Conversant Capital. Conversant’s founder and managing partner, Michael Simanovsky, said that since his firm’s initial investment in Sonida in November 2021, “We have worked diligently with the management team along three key initiatives—improving operations, strengthening the balance sheet, and growing the business.”

“With tremendous progress already achieved in all three areas, today’s transaction represents a new milestone in Sonida’s evolution, significantly enhancing the company’s portfolio, balance sheet, and long-term growth prospects,” Simanovsky said. “We’ve been particularly impressed with management’s ability to integrate and improve numerous newly acquired assets, representing over 35% growth in the portfolio over the last 18 months.”

“With continued accelerating momentum, we’re thrilled to increase our equity investment,” Simanovsky added. “This reflects our continued commitment to Sonida and confidence in the company and its management team’s ability to create value by executing on its strategy, including pursuing attractive acquisition opportunities amidst the highly compelling senior housing operating fundamentals.”