New Senior Announces Definitive Documentation for Internalization
Company’s Management Function Will Be Internalized as of
Strategic Review
As previously announced on
The strategic review has been a multi-step process, resulting in the following previously announced initiatives: (1) the termination of triple net leases and entry into new management agreements for 51 IL Assets in
On
Termination and Cooperation Agreement
Currently, the Company is externally managed by
Under the Termination and Cooperation Agreement, the parties have agreed to terminate the Management Agreement effective as of
As a result of the termination of the Management Agreement, the Company will cease to be externally managed, and the Company will become the employer of its officers and employees.
Expected Benefits of the Internalization
The internalization is expected to have the following key benefits:
- Cost-Savings. The Company estimates that the internalization will result in a reduction in general and administrative expenses of approximately
$10 million per year. - Simplicity and Transparency. The internalization is expected to simplify the Company’s organizational structure and increase the transparency of its financial results.
- Expanded Institutional Ownership. New Senior’s institutional ownership base could expand as a result of increased comparability with its peers in the healthcare REIT sector.
The internalization is one of several types of transactions that were given thorough consideration by the Board and the Special Committee during the course of the strategic review. Having considered a range of alternatives, the Board and the Special Committee believe that internalizing the Company’s management function will provide the greatest opportunity to maximize value for shareholders.
ABOUT NEW SENIOR
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including without limitation statements regarding the expected internalization of the Company’s management, including with respect to the potential costs and benefits, and the expected completion, thereof. These statements are not historical facts. They represent current expectations regarding future events and are subject to a number of risks and uncertainties, many of which are beyond our control, that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, risks and uncertainties relating to the Company’s ability to successfully manage the transition to self-management. Accordingly, you should not place undue reliance on any forward-looking statements contained herein. For a discussion of these and other risks and important factors that could affect such forward-looking statements, see the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent annual and quarterly reports filed with the
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