Mr. Samir Manji reports
AMICA MATURE LIFESTYLES TO ACQUIRE MAJORITY OWNERSHIP IN AMICA AT WESTBORO PARK AND ANNOUNCES $24.8 MILLION OFFERING OF COMMON SHARES
Amica Mature Lifestyles Inc. has entered into agreements to acquire an additional 73.5-per-cent ownership interest in Amica at Westboro Park, located in Ottawa. In connection with this acquisition, the company has also entered into an agreement with Canaccord Genuity Corp., together with a syndicate of underwriters, to purchase, on a bought deal basis, 2.75 million common shares of the company at a price of $9 per common share.
The acquisition of the additional 73.5-per-cent ownership interest will bring the company's ownership position in Amica at Westboro Park to 87.5 per cent. The closing date and effective date for the acquisition are anticipated to be June 1, 2012.
The purchase price to be paid for the acquisition of the 73.5-per-cent ownership interest will be approximately $30.72-million, including cash consideration of $7.35-million, and the assumption of the vendors' share of a mortgage on the property and other net liabilities in the amount of approximately $23.37-million.
"Amica at Westboro Park is currently in the late stage of lease-up with occupancy at approximately 82 per cent. Based on an additional three net pending move-ins, occupancy is expected to reach 84 per cent by the end of April. We are confident that we will see this community reach stabilized occupancy over the course of the next few months," said Samir Manji, chairman, president and chief executive officer. "Additionally, we are pleased with the financial performance of Amica at Westboro Park and we look forward to adding Amica at Westboro Park to our growing list of consolidated properties."
Amica at Westboro Park opened in September, 2008, and has a total of 137 suites. It is located in the mature and prestigious Westboro community of Ottawa. It represents one of the premier retirement residences in the entire Ottawa market and includes all of the Wellness & Vitality design features that represent the Amica brand, including a Luxura Spa, featuring salon services such as manicures, pedicures and massage therapy. Based on the projected fiscal 2013 net operating income, the company estimates that the capitalization rate to be paid on this transaction is approximately 7 per cent and would be approximately 7.5 per cent upon achieving occupancy of 95 per cent. The community has a first mortgage in place (non-CMHC-insured) at an interest rate of 4.00 per cent that matures on Dec. 31, 2012.
Pursuant to the offering, the company has agreed to sell 2.75 million common shares, on a bought deal basis, to the underwriters, at a price of $9 per common share for gross proceeds of $24.75-million. In addition, Amica has granted to the underwriters an overallotment option exercisable at any time up to 30 days after closing of the offering to acquire up to an additional 412,500 common shares of the company. In the event that the overallotment option is exercised in full, the gross proceeds of the offering will be $28,462,500. The net proceeds from the offering (after deducting the underwriters' fee and estimated offering expenses) will be used to finance the Amica at Westboro Park acquisition described herein, future acquisition opportunities, capital needs of properties in lease-up and development, future acquisitions of increased ownership positions in existing Amica communities, and for general corporate and working capital purposes.
Closing of the offering is currently expected to take place on May 15, 2012, and is subject to certain conditions, including, but not limited to, the receipt of all necessary approvals, including the approval of the Toronto Stock Exchange and the securities regulatory authorities.
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